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Sunday, Dec 08, 2019

WTO fails but Nath won’t backtrack

Union Commerce Minister Kamal Nath demonstrated that India stood for its own self interest and the interest of all developing countries, report P Vohra and G Choudhury.

delhi Updated: Aug 02, 2008 23:16 IST
Pankaj Vohra and Gaurav Choudhury
Pankaj Vohra and Gaurav Choudhury
Hindustan Times

By declining to be overwhelmed by the US trade representative Susan Schwab and her colleagues during the failed World Trade Organisation talks in Geneva, Union Commerce Minister Kamal Nath by his consistent and firm stand demonstrated that India stood for its own self interest and the interest of all developing countries. His stand in fact provided a fitting rebuttal to the Left's propaganda that India would sit on the US's lap and serve its interests following the nuclear deal. The combative manner in which Nath took on the US negotiators was evidence enough that India could not be bullied by anyone, not even the US. The minister joked with the Americans and had a "one dollar deal for them'', a dare to cut one dollar of farm subsidies''. Though the talks have failed, the Geneva meeting reflected that India would always protect its sovereignty and interests thereby totally rubbishing the Leftists' view prior to the trust vote in Parliament.

The 61-year-old Commerce Minister, speaking on behalf of all developing countries, stood firm and maintained that Doha was meant to decrease poverty and not increase prosperity. "I am not willing to negotiate the livelihood of millions of people for the benefit of non-competitive European industries," he told HT on his return from Geneva. Nath was congratulated by his colleagues in the government for his stand and for holding his own in the face of immense pressure from the US and some other countries. He was in constant touch with the Prime Minister who also reiterated that "we will not compromise our agricultural interests''. The farmers and their interests are key to the ruling dispensation, which has been wooing them prior to the next Parliamentary polls. The government was under tremendous pressure not to yield to the demands of the western negotiators.

The blame game has already started and Nath gave it back to Schwab, holding her responsible for the impasse. According to him, the negotiations broke down after Schwab declined on Tuesday afternoon to accept a compromise brokered by the European Union on farm safeguards. Nath's role and firm stand reflect the changing balance of power at the WTO and in the global economy as a whole, many experts feel. The minister said that he pleaded with her but ended the talks when they discovered that there did not seem to be any meeting ground any more. The talks focussed on farm trade, a highly politicised subject the world over. The US and European negotiators wanted new access for their farm goods in developing countries and were offering to scale back subsidies to their producers that can give trade advantages.

India has accused the United States of giving primacy to "commercial interests" over the livelihood of billions of poor people that led to the breakdown of the latest round of multi-lateral trade negotiations under the WTO.

The talks in Geneva collapsed on Tuesday after India and other developing countries insisted that there should be enough scope to protect subsistence farmers and small industries from being submerged by a flood of cheap imports from the US and EU. The instruments of Special Products and Special Safeguard Mechanism (SSM) were built into the Doha round of discussions in 2001.

While the Special Products are designed to allow developing countries to impose higher duties on their vulnerable products, specially the products affecting the livelihoods of subsistence farmers and affecting the food security of a nation, SSM is designed to protect the farmers from sudden import surges and price dips by applying an additional safeguard duty over and above the bound rate.

The US was pressing for a proposal that would allow member states to raise import duties at a 40 per cent "volume trigger".

This meant that if the average imports of a product over the last three years is 100 tonnes, unless the imports cross 140 tonnes, the safeguard duty could not be activated.