New Delhi: The United States is willing to cut farm subsidies further provided other nations reciprocate by improving access to their markets and reducing tariffs, the US commerce secretary said.
“We would be willing to take the lead on subsidies but we can’t do it unilaterally,” Carlos Gutierrez told Dow Jones Newswires. He also said that India holds the key for the successful conclusion of the long-running World Trade Organization talks under the Doha Round. Gutierrez is on a two-day visit to India aimed at boosting bilateral trade.
The US is India’s largest trading partner. Last year, two-way trade hit $32 billion (Rs1.4 lakh crore), Gutierrez said.
He said the US would like to see “movement” in terms of India cutting tariffs on agricultural products and providing greater market access for industrial goods from other countries. “It is important to begin to see where movement is possible,” Gutierrez said.
India, he said, has a key role in the WTO talks. “India is a leader among developing nations and developing nations look to India to see how India makes its decisions (on WTO issues),” he added.
Asked about the US farm bill, which many see as crucial for WTO negotiations, Gutierrez said: “The bill is a domestic matter; the WTO talks are separate from it.”
Talks among the 150 members of WTO broke down in July mostly due to the reluctance of developed countries to cut protective measures for their farmers. At January’s World Economic Forum meetings, representatives of many countries said they wanted negotiations to resume.
The US farm bill, still to be approved by Congress, plans to cut farm spending by $18 billion to $87 billion for the next five years. But many countries have said the cut is not steep enough.
The European Union has said it is prepared to make deeper cuts to its own subsidies if others, including the US, also make large cuts.
“We believe that getting an (WTO) agreement as soon as possible is important. However, the real important objective is to get a good agreement,” Gutierrez said. “Because we are in a hurry and time is a factor, it doesn’t mean that we should settle for something less than a strong Doha Round development agreement.”
Gutierrez said that India needs to open its market further to attract investment and maintain the pace of economic growth. “Every country in the world is competing for capital and capital will go to those markets that welcome investment,” he said.
US companies want India to liberalize the retail, insurance, and pension sectors, thus opening up opportunities for foreign firms. But the Indian government has not been able to move as fast as it would like due to opposition from its communist allies who fear that liberalization will cost local jobs.
“We believe that the faster an economy liberalizes, the more an economy liberalizes, the more you will see that reflected in growth and job creation,” Gutierrez said.
Referring to US exports, he said growth is “due to engaging the world, opening up to free trade and having free trade agreements...the proof is in the result and the numbers we have seen...show very tangible results”.
US data showed exports rose 12.8% last year to $1.438 trillion while imports grew 10.5% to $2.201 trillion.