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In a major proactive initiative to bring the focus of the WTO negotiations to the development agenda of the ongoing Doha Round, Shri Kamal Nath, Minister of Commerce and Industry, tabled last evening an ambitious “100-100 Initiative” in Agriculture in order to ensure a level playing field for farmers of developing countries who are denied market access due to the application by some developed countries of specific duties amounting to very high tariffs on products of export interest to developing countries. The two-fold initiative mooted by the Minister through an intervention at the Informal Ministerial Meeting – Mini-Ministerial – of the World Trade Organisation (WTO) in Paris on 4th May (Wednesday) proposed that a) all member countries of the WTO – both developed and developing countries – convert 100 % of all specific duty tariff lines into ad valorem equivalents (AVEs), and then bind these tariffs in ad valorem terms after conversion; and b) that regardless of the formula or methodology that is finally adopted for the conversion, the maximum agricultural tariff should not exceed 100 % at the end of the Doha Round. This will ensure greater access for farmers of developing countries to the markets of the developed countries, giving them a fairer share of the world trade in agriculture. The Mini Ministerial was chaired by the Trade Minister of Hong Kong China and was attended by over 30 countries.
Shri Kamal Nath as a member of the FIPS (comprising Australia, Brazil, India, the European Union and the US) also helped in achieving a breakthrough by arriving at an agreed formula for conversion of specific duties into ad valorem equivalents (AVEs) which was supported by participants at the Mini Ministerial and would be approved in Geneva by the 148 member countries. This gateway issue has now finally been resolved after months of protracted negotiations. Lack of progress on this issue was widely seen as due to the obstructionist attitude of some developed countries. Nearly 98 % of all specific duties are applied by the developed countries. Giving India’s perspective on the issue, the minister said : “ If we are all agreed that specific duties lack transparency, and that they unfairly penalize more efficient producers, then we must declare as our objective the conversion of all specific duties into AVEs on a permanent basis. In fact, once we decide that, then all this quibbling about the formula for conversion will evaporate”.
Intervening on non-agricultural market access (NAMA) issues, Shri Kamal Nath came down heavily on developed countries for applying double standards. Thus, developed countries sought reduction from bound rates and were not willing to bind duties in ad valorem terms in Agriculture, but called for reduction from applied rates and 100% binding in ad valorem terms in NAMA. Supporting Shri Kamal Nath, the Australian Trade Minister described it as the “schitzophrenia of the developed countries”. Shri Kamal Nath referred to the joint proposal on NAMA already submitted by Argentina-Brazil-India (the ABI formula) as a balanced and equitable one as it combined a satisfactory degree of liberalization with the required security for developing countries and incorporated the principle of less than full reciprocity and flexibilities in tariff reduction for developing countries, besides also addressing issues of tariff peaks and tariff escalations. He cautioned members not to treat harmonization of tariffs as an end in itself – “it is not in the mandate, so let us not make it a goal”.
He also urged removal of non-tariff barriers (NTBs), pointing out how the least developed countries (LDCs) and other developing countries were unable to make a dent in the developed country markets even with low or zero tariffs, due to protectionist measures such as technical requirements and standards, often disguised as environmental or health requirements.
In another intervention, the Minister said services must be given priority in the negotiations and articulated India’s interest in Modes 1 (cross border supply) and Mode 4 (movement of natural persons).
SB/MRS
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