Kamal Nath stands his ground in stalled WTO talks

Kamal Nath stands his ground in stalled WTO talks
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First Published: Fri, Jul 13 2007. 05 48 PM IST
Updated: Fri, Jul 13 2007. 05 48 PM IST
New Delhi: As the unofficial voice of developing countries in the deadlocked World Trade Organization trade talks, Kamal Nath has been called a lot of names in recent weeks -- including stubborn and irresponsible.
The latest round of talks among a group known as the G4 nations -- India, Brazil, the US and a representative of the EU -- ground to a halt late last month after Nath, India's minister of commerce and industry, and Brazil's foreign minister, Celso Amorim, walked out. The US trade representative, Susan C. Schwab, described their actions as "inflexible" and "low ambition”, and said they could harm emerging nations.
The stalled talks are emphasizing a deeper issue: In some ways, the balance of power between advanced and developing countries is shifting, politicians outside the West, including Nath, say. "The reality is that there is a new economic architecture," Nath said in an interview this week in his New Delhi office. "This new economic architecture is going to have new windows and new doors. It can't be wished away."
India and Brazil are refusing to open their markets further to goods from Western countries without a substantial reduction in subsidies provided to Western farmers.
On Thursday 12 July, Brazil filed a complaint with the WTO about US farm subsidies. "This complaint attacks the entire US farming policy," Donizeti Beraldo, head of trade and international affairs at Brazil's National Agriculture Confederation, was quoted by Bloomberg News as saying. Then, referring to the trade talks, Beraldo added, "If the US fails to advance on talks, they will be at risk of more complaints."
WTO members are preparing for what is expected to be a decisive round of negotiations at the group's headquarters in Geneva. On Monday 12 July, the presiding officers will release draft agreements that could form the basis of a compromise or, depending on the view of countries like India, give a firm indication that the current round of trade talks begun in 2001 is on its last legs.
Nath, whose office includes a shelf of thick WTO-related publications, was quick to brush off questions about his flexibility, but still left no room for compromise.
The issue is not flexibility, he said: "It is removal of subsidies, which are a distortion of global trade." Unless they are removed or substantially reduced, he continued, there will be no way to go forward with the talks. "Is anyone saying that fair trade means the continuation of subsidies?"
India and Brazil are asking the US to reduce the estimated $22 billion in subsidies that it allots to farmers, and the EU to trim its farm aid from 55 billion euros ($75.8 billion), saying the subsidies keep food prices on world markets artificially low and make it difficult for farmers from developing countries to compete.
Advanced industrial nations would like to see a substantial reduction in the taxes on exports to countries like India and Brazil to give their manufacturers access to those fast-growing economies.
Nath said he is seeking some understanding from the US. Despite the growth of outsourcing and high-technology jobs in India in recent years, agriculture still supports about two-thirds of the country's citizens.
"In the end, it is going to rely on a comprehension of the ground realities of India, and a sensitivity to that," Nath said. "I have been pleading with Susan Schwab, please respect India's sensitivities when it comes to sustenance farmers."
India is in the midst of an economic boom that has driven up stock market indexes, wages and real estate prices to near record highs. Still, Nath was quick to distance the country from developed economies.
India "is so far away from the US and the EU," he said. "We have 300 million people that live on $1 a day. We're talking about 100 years before India hopes to get anywhere close to the US or the EU."
Nath's hard line in the WTO talks was in marked contrast to his three-year stretch as commerce minister. There, his tenure has been characterized by an increasing openness to foreign investment and partnership at home. He has sometimes faced criticism that he is too business-friendly.
Nath said his growing role as spokesman for developing nations is not deliberate. "I am doing what I am required to do and what is appropriate for me to do for India and for other developing countries," he said.
In his view, the trade talks, which were intended to break through bottlenecks that have halted worldwide agreements, have been a failure.
"The G4 process has not led anywhere," he said, "so I think that the G4 process will be forgotten. We should expand this into a larger process that will be more inclusive."
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First Published: Fri, Jul 13 2007. 05 48 PM IST
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