The last-ditch effort to put on track the World Trade Organisation’s (WTO’s) deadlocked Doha round negotiations gets under way from Thursday in New Delhi. The talks have been in a limbo over the US refusal to make major concessions on farm subsidies. India has been insistent that without the removal of "trade distorting" subsidies a meaningful dialogue will not be possible.
The Doha round, dubbed as a development round in global trade talks, has primarily faced a stalemate over agricultural trade. The trade ministers of India, Brazil, the US and the EU - the G-4 — are reviewing the state of play since February this year. The meeting of the G-4 will be followed by a meeting of the G-6 ministers (G-4 plus Japan and Australia).
The US is being pressed to make deeper cuts in farm subsidies, while the EU is under pressure to reduce farm tariffs further. Developing nations, led by India and Brazil, are being urged to open their markets to more manufactured and farm goods. However, it is clear that unless the outlines of a possible agreement in agriculture are visible, there may not be appreciable movement in other areas, including non-agricultural market access and trade in services.
The US has offered to cut its overall trade-distorting domestic support by only 53 per cent - against the developing nations’ call for 80 per cent cuts - resulting in an entitlement of $22.7 billion. At the same time, it has asked for a high level of agricultural market access, which translates into average farm tariff cuts of 70 per cent for India, according to officials close to the negotiations.
The officials said that the European Commission had shown movement towards the developing countries’ position of at least 54 per cent average tariff cuts by developed countries.
"However, the EC has not moved to agree to domestic consumption as a basis for expansion of the tariff rate quotas (a form of market access) in the treatment of sensitive products of developed countries, which is the position of the developing nations and the US. So far the EC has offered additional market access of around 2.5 per cent of domestic consumption as against the US demand of around 7.5 per cent," said an official who did not wish to be identified.
An important political dimension surrounding the agriculture negotiations is also the uncertainty regarding the extension of the Trade Promotion Authority (fast-track clearance) by the recently reconstituted US Congress beyond its scheduled expiry on July 1, 2007, and the determinations on the new US Farm Bill 2007.