Days ahead of the World Trade Organisation ministerial meeting begining July 21, India on Wednesday warned that it would walk out of the talks if its core interests — protection of the livelihood concerns of its poor farmers and infant industries —are not taken on board.
“There will be no deal if we don’t get what we want. Our coalitions, the G-20, G-33 and Nama-11, are intact. We have the full option to walk out. There can be no agreement unless India agrees. We are not compromising on anything,” commerce and industry minister Kamal Nath told reporters here.
The global trade deal talks had collapsed last year as Nath and Brazilian foreign minister Celso Amorim, both representatives of developing countries, walked out in Potsdam (Germany) during their talks with the developed country representatives, the US and the European Union.
The Doha Round negotiations of the WTO began in 2001 and has been deadlocked owing to major differences between the developed and developing world on agricultural and industrial goods. Even in Potsdam, the differences remained the same, that is the developing countries demanding that the rich countries drastically reduce their “trade distorting” farm subsidies, while the developed countries in turn asking for more market access in the developing world for their industrial goods.
On Wednesday, Nath said the Special Products (SPs or agri products that are subjected to minimum or no duty cuts) and Special Safeguards Mechanism (SSM) available to protect the resource poor agriculture dependent population in developing countries from cheaper and subsidized imports are “ make or break issues.”
“These (SPs and SSMs) are not issues for negotiations,” the minister said. He added “we are concerned about our sensitivities in agriculture. Unless we get the package we want on SPs and SSMs, there is nothing we can agree to in other areas.” Also, India’s demands on being able to provide subsidies to its poor fishermen must be included in the agreement, he said. India is against a move by rich countries to disallow subsidies to poor fishing communities using small motorboats on the pretext that it would result in environmental damage.
Nath said the US has to reduce their “trade-distorting” farm subsidies from $55 billion to around $13-16 billion, while the EU had to cut their farm subsidies by 70%.
Turning to services exports, he said it accounts for 40% of India’s total exports of goods and services and was to the tune of $86 billion in 2007-08. The minister added that services exports account for 55% of the country’s GDP and the sector provides employment to around 142 million people, comprising 28% of India’s workforce.
India has been demanding better market access for its services in developed countries in sectors like health, in R&D, engineering, construction, telecommunication and computer related services. India is seeking more market access, particularly in outsourcing and movement of natural persons and service suppliers. But Indian professionals in these fields are unable to get short-term visas in several developed countries to offer their services due to their restrictive domestic regulations, Nath said.
“Unless binding commitments are made by developed countries in services, there can be no agreement. I have even written to WTO Director General Pascal Lamy on this,” he said.
As the UPA government seeking a trust vote in Parliament on July 21 and 22, Nath, a MP from Chhindwara (Madhya Pradesh), would be unable to attend the Ministerial Meeting on the same dates. “I have designated Commerce Secretary Gopal Pillai to represent me at the meeting. WTO has given us a special permission,” Nath said.
Nath said earlier he had consultation with Prime Minister Manmohan Singh on India's negotiating strategy for the crucial five-day meeting being convened from July 21 to finalise the modalities for completing Doha Round of trade talks that are already running much behind schedule.
“The Prime Minister is of the view that unless India's interests are protected we should not move forward,” Nath said.
He, however, added, “I am hopeful that this meeting will lead to progress and conclusion. I am optimistic and look forward to developed countries coming forward and recognising the current global economic situation, global food situations, structural flaws in agriculture that need to be corrected. The developed countries should come forth to be givers and not be takers.”
On industrial goods, Nath singled out clauses on anti-concentration and sectorals. As per the anti-concentration clause, sensitive tariff lines that would not be subject to tariff reduction cannot be concentrated in one particular sector. In the sectoral talks, certain sectors would be culled out from the entire list of goods and tariffs on these items would be brought down to zero within a specified period that would be decided during the talks.
Sectors like auto, textiles and chemicals are likely be severely hurt by these clauses, if they are included in the final agreement.
Pointing out that India needs flexibilities in protecting these sectors, Nath said “there would be no compromise on this. The EU has got strong demands on this (bring down duties in sectors) and it cannot be agreed to. There cannot be any agreement on industrial products that compromises or creates any kind of liberalization in auto, auto-components and textiles. These are sensitive areas and these infant industries are beginning to get investment.”
“In the auto sectors, most of the US and EU manufacturers are setting up plants in India. So their investments are coming here because they have jumped over the tariff barrier. We cannot have any compromise on this,” he said.