New Delhi: The government has termed comments made by the United States Trade Representative Susan Schwab that India was not a proactive contributor to the onoging World Trade Organization (WTO) discussions, as ‘inaccurate and unfortunate’.
Commerce ministry officials expressed ‘utter surprise’ at the statement by Schwab made on Monday, since Indian officials have just returned after bilateral meetings among chief WTO negotiators of the US, the EU, India and Brazil in London. “Throughout the recent bilateral discussions, the US side has been reluctant to mention any ‘headline’ numbers. They are still trying to sense the mood on the (Capitol) Hill,” an official said.
Officials said it was the insistence of the US that it would be willing to bring down the trade distorting domestic farm support or subsidy to only $22 billion (Rs96,910 crore) from $48 billion, which had caused WTO negotiations to break down in July 2006.
“In 2005, the US had given farm subsidies of $19 billion, which came down to $11 billion in 2006. Given this scenario, offering to reduce farm support to $22 billion is not something acceptable to the developing countries. The US has to do more,” the official said.
The latest missive by the US is also being seen as a tactic to exert pressure on India. Signals coming out of last week’s bilaterals in London are that the US and the EU have come closer to understanding each other’s position on agriculture. “Since Brazil is also an agriculture exporting country, there are attempts being made to break ranks among the developing countries,” a trade negotiator said.
Ministry officials, however, dismiss such comments about Brazil, which has defensive interests in industrial goods and services—whereby it has to protect its domestic industry. “Developing countries have realized that they have a voice only if they stick together,” officials said.
India and Brazil are having a crucial bilateral meeting in Geneva next week, where commerce and industry minister Kamal Nath is slated to meet his Brazilian counterpart Celso Amorim. The G-33 group of developing countries, which have defensive interests in agriculture, are meeting in Jakarta on 21-22 March. Prior to this meeting, New Delhi is hosting an international seminar on WTO on 12-13 March, which is slated to be attended by the WTO chief Pascal Lamy.
If the US and the EU do converge on agriculture, the focus of the talks is expected to shift to industrial goods. For effecting duty cuts on industrial goods, developed countries have been suggesting the so-called Swiss coefficients of 10 and 15 for developed and developing countries, respectively. It means reduction commitments of 33% for most developed countries and 66-70% for developing countries. A higher coefficient means a lower tariff cut, and developing countries have been seeking a coefficient of at least 20 or more.
“Since the average duty on industrial items in the US and the EU is 3-4%, they should have a Swiss coefficient of less than two, since the developed countries are expecting them to cut their average tariffs of 30% by half,” officials added.