KAMAL NATH CALLS FOR ROADMAP FOR ELIMINATION OF TRADE DISTORTING FARM SUBSIDIES BY DEVELOPED COUNTRIES SAYS ONE DOLLAR PER DAY VERSUS ONE BILLION DOLLAR PER DAY THE REAL ISSUE
Date : 13 Dec 2005
Location : New Delhi
Mr. Kamal Nath, Minister of Commerce & Industry, has called upon developed countries to come forward with a roadmap for total elimination of trade distorting agricultural subsidies which depress international prices of agricultural produce, thereby hurting farmers in developing countries like India. Addressing the international non-governmental organisations (NGOs) and a Press Conference ahead of the opening of the Sixth Ministerial Conference of the World Trade Organisation (WTO) in Hong Kong today, Mr. Kamal Nath emphasised that the real challenge before trade negotiators was the paradox of “one dollar per day versus one billion dollars per day”, referring to the fact that the vast majority of the poor in developing countries were subsisting on one US dollar per day or less as against agricultural subsidies as high as US $ 1 billion per day in developed countries.
“Hong Kong must address the issues of the least developed countries (LDCs), vulnerable economies, small states and must provide a level playing field for all. In agriculture, if we are to correct the existing structural flaws, export subsidies must go on a date to be negotiated. On domestic support, there must be a roadmap for reduction and eventual elimination. (Agricultural) tariff is the only defensive mechanism available to the developing countries to guard against subsidized imports. For example, tariff on cotton in India is only 10% whereas the US subsidy for cotton is over 42%. We are not against trade flows but against subsidy flows”, he explained.
Replying to questions on non-agricultural market access (NAMA) or industrial tariffs, the Minister said what was important was not the formula but what it actually translated into in real terms. Criticising the latest NAMA proposal put forward by the European Union (EU) at the G-4 meeting last night, Mr. Kamal Nath pointed out that the EU proposal for Swiss co-efficient of 10 for both developed and developing countries would translate into industrial tariff reduction of 77% for India while the EU would reduce only by 24%! He described this as special & differential (S&D) treatment in reverse and rejected the proposal outright as unacceptable. He said the EU must come forward with specific proposals for reducing its tariffs, before developing countries were asked to reduce by even two-thirds of that, in keeping with the principle of proportionality implicit in the S&D provisions for developing countries in WTO agreements. “Market access for India in NAMA means elimination of tariff peaks and tariff escalation in developed country markets, end to abuse of anti-dumping laws and removal of non-tariff barriers (NTBs) all of which adversely affected trade flows from developing countries. Market access is not an issue of tariffs alone”, he added.
The Minister appreciated the crucial role played by NGOs post-Uruguay Round in creating awareness about global trade issues and providing critical inputs for negotiators. He also told NGOs that the issue of harmonizing trade related intellectual property rights (TRIPs) Agreement with the Convention on Bio-Diversity (CBD) was important for the prevention of bio-piracy and preservation of the rich bio-diversity of many developing countries. He reiterated that India stood by the LDCs and would continue to do so in the Doha Round negotiations which must be brought back on the development track. Later today, Mr. Kamal Nath is scheduled to have bilateral meetings with the trade ministers of South Africa and China.