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'Our only defence to US subsidies is agri tariffs?

"We cannot allow any formulation that impinges on livelihood security,? Nath tells Prerna K Mishra.

india Updated: Feb 01, 2006 12:28 IST
Hindustan Times
Hindustan Times

With agriculture contributing less than three per cent to the world trade, European Trade Commissioner Peter Mandelson feels it is too small an issue to take so much mind space at the WTO. But Commerce and Industry Minister Kamal Nath does not see eye to eye with that.

“I cannot allow the Indian market to be flooded with agri products, displacing my farmers. Our only defence to the US subsidies is the agri tariffs. We cannot allow any formulation that impinges on livelihood security,” he told Prerna K Mishra on the sidelines of the WEF in Davos.

There is nothing official about the mini-ministerial meeting held in Davos.What has it accomplished?

Nearly 20 countries met at the mini-ministerial here. Obviously, what we decided here will have to be ratified by the other members. But what it has accomplished is a consensus on wanting to proceed. The trade ministers have agreed to detailed timeframe for carrying forward the talks. We have set for ourselves April 30 deadline for resolving outstanding issues in the troubled agriculture nego tiations in WTO. This is fairly significant, given that we are time-bound to close the negotiations launched at Doha in 2001 by 2006-end. After the Hong Kong Ministerial in December, this is the first major move to work out the modalities.

With the focus tuned on agriculture, are we underplaying the need for negotiation in services and industrial production?

Though the gravitation is to wards the agricultural issues, we are just making sure that the 650 million population in India and similar populace around the developing world, employed in subsistence agriculture, does not get displaced. We are not trying to be projectionists here but agriculture is structurally the most flawed area as, thanks to US subsidies, we cannot even arrive at the actual prices of the agricultur al products that are artificially priced right now.

What happens to services?

Just when India is getting on to the bandwagon of knowledge process outsourcing and engineering process outsourcing from being just a low-cost BPO hub, we have some concerns regarding the non-tariff barriers being raised by some developed countries. As more and more countries are realising their non-competitiveness in the changed business scenario, they are taking recourse to the abuse of anti-dumping and phyto-sanitary issues to stall the industrial march of the developing world. We need to handle this new challenge.

The underlying message at Davos was that of India being a hi-value manufacturing hub. How does this positioning help?

China is mass production, export-driven economy, we are hitechnology, domestic demand driven economy. That is clearly the message that we sent out at Davos. Services need manufacturing to take growth to the next level. The mathematics is simple. We need to grow at 10-12 per cent in manufacturing to create five million jobs and every job in manufacturing will create three services jobs. So we are clearly talking about 20 million jobs which makes a lot sense to drive a job creating growth.

First Published: Feb 01, 2006 12:28 IST