New Delhi: India expects a breakthrough in the Doha round of trade talks by the end of 2009, even though it is not changing its stance, as the stalled negotiations are expected to gain momentum from September, the country’s trade secretary said on Friday.
Last year, trade ministers came close to a deal, but the talks collapsed over a dispute between the United States and emerging economies spearheaded by India over proposals to help farmers in poor nations.
“A breakthrough could be expected by this year-end. But modalities are some time away,” Rahul Khullar told the agency in an interview.
India and the United States have initiated talks after elections in the two countries. Indian trade minister Anand Sharma and US trade representative Ron Kirk have agreed to work together towards resolving “outstanding issues”.
Khullar said New Delhi would host a mini-ministerial meeting on 3-4 September, to be attended by ministers from 35 countries, to discuss ways of taking the trade talks forward.
“Come September-end and the whole thing will gather some momentum. But it is plainly unrealistic to assume that the Doha Development Round talks would conclude by end of 2009,” he said.
New Delhi had not changed its stance and would continue to demand cuts in tariffs and subsidies from the United States and the European Union, Khullar said.
“You can’t expect a sudden change in anyone’s stance.”
The Doha Development Round was launched in late 2001 to boost global trade and help developing countries increase exports by lowering trade barriers.
But the global economic crisis has prompted some countries to adopt protectionist policies aimed at supporting domestic industries and averting massive job losses.
World Trade Organisation (WTO) chief Pascal Lamy on Wednesday said world trade volumes were expected to shrink 10% this year, although Asia was leading a recovery in global trade.
India’s exports started declining in annual terms last October, and Khullar said a recovery was still not in sight.
“The export scenario is one of serious concern. The base year effect will start wearing off after September, but we cannot predict whether there will be a recovery after that or not.”
India announced a series of relief measures for exporters, including tax breaks and subsidies, but it was not enough to prevent money-losing companies from cutting jobs. “We know certainly that labour-intensive industries like gems and jewellery, textiles and leather have suffered,” Khullar said.
“Has the situation improved? Yes, there are some signs of revival, maybe because of the stimulus packages or a revival of demand abroad. But the situation has still not returned to normal.”
Asked if existing incentives could be extended to next year, Khullar said: “We are watching the situation. Come December, let’s see the situation and then we will make a call.”
He said the government was unlikely to change the rules for tax-free exporting units, even though some had halted expansion.