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Sustained pressure by the G-20 on the need for elimination of trade distorting domestic support given by developed countries in order to ensure a level playing field for farmers in the developing countries has led to the latest US offer on reduction of farm subsidies. “The latest US offer shows that the G-20 has become a force to reckon within the WTO negotiations”, Shri Kamal Nath, Minister of Commerce and Industry, said while assessing the US proposal on Domestic Support in agriculture in the meeting of the World Trade Organisation (WTO) Ministers of FIPS (Five Interested Parties) in Zurich. “We will have to analyse its implications in greater detail”, he said. As expected, the US has made the offer conditional on greater market access. However, Shri Kamal Nath made it clear in unambiguous terms that whatever be the domestic support cuts by developed countries, India would not compromise on her vital interests as far as market access was concerned. With the latest US offer on the heels of the EU commitment based on its reform of its Common Agricultural Policy (CAP), what is apparent is that the G-20 strategy as an alliance in the WTO agriculture negotiations is proving successful.
While assessing the US proposal with a guarded welcome as a step in the right direction, Shri Kamal Nath said: “what is needed is not just a step but a leap” in the direction of real cuts in domestic subsidy which heavily distorted world agricultural trade. Under constant pressure from the G-20, the US has offered to cut its aggregate measure of support (AMS) by 60%, blue box domestic support by 50%, and de minimis by 50%, giving an overall cut of 53%. They have also agreed to the G-20 demand outlined in the Delhi Declaration of February of 2005 for eliminating export subsidies completely by 2010.
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