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At India's request, the G-20 has agreed to prepare a paper on the right of all developing countries to take remedial action against subsidised imports. The proposal was mooted by Shri Kamal Nath, Minister of Commerce and Industry, who is presently leading the Indian delegation to the meetings of G-20, G-33 and other key interactions taking place in Geneva ahead of the Hong Kong Ministerial Conference of the World Trade Organisation (WTO) scheduled to be held in December this year.
The G-20 - an alliance of agricultural exporting countries in the WTO negotiations on agriculture - has finalised its proposals on market access and domestic support and has presented the proposals to the Trade Negotiations Committee (TNC) of the WTO in Geneva. India believes that the proposals represent the true middle ground between the extremes of the US proposals on the one hand, and the European Union (EU) and G-10 proposals on the other. The defensive market access interests of India are fully reflected in the proposals, Shri Kamal Nath said. The G-20 proposal on market access states that: "G-20 recognises the need to safeguard developing countries' farmers against imports from developed countries benefiting from trade-distorting domestic subsidies. Developing countries will have the right to have recourse to remedial action against such imports. G-20 will submit a proposal to ensure that right".
On domestic support, the G-20 proposal recalls that the Doha Declaration called for "substantial reductions in trade distorting domestic support", referring to the huge subsidies given by developed countries to their farmers, thereby distorting and depressing agricultural prices in the international market to the detriment of farmers in developing countries. It also recalls the Framework Agreement of July 2004 which provides for overall restriction in level of subsidies regardless of how it is classified under different boxes and allows for fulfilment of the objective of bringing down the levels of applied trade distorting domestic support. Accordingly, the G-20 has proposed that the bands and cuts for developed countries in respect of domestic support be as follows: in bands or thresholds of over US $ 60 billion, cut of 80 %; US $ 10 to 60 billion, of 75 % and 0 to 10 billion, cut of 70 %. Further, developing countries without aggregate measure of support (AMS) entitlement (i.e., with AMS below the permissible limit of 10 % of total value of production) - like India - shall be exempt from making reduction in their domestic support, since they are also exempt from making reduction to their de minimis.
On market access, G-20 proposal states that in line with the Doha mandate, "G-20 proposes that developed countries will undertake a formula cut of at least 54% on average, while developing countries will be subject (to a lower cut) to a maximum tariff cut of 36%, on average". In this context, the G-20 emphasises that "special and differential treatment for developing countries constitutes an integral part of all elements of the negotiation. The G-20 is also determined to make operational the provisions in the Framework on special and differential treatment for developing countries, in particular Special Products (SPs) and Special Safeguard Mechanism (SSM), so as to preserve the food security, rural development and livelihood concerns of millions of people.. The Group reiterates its commitment to work together with the G-33 and other interested Groups to render effective and operationalise these instruments. The G-20 is finalising its contribution on tariff escalation" (N.B.:Tariff escalation refers to the issue of higher import duties on semi-processed or finished products than on raw materials, which adversely affects exports of value-added products from developing countries).
SB/MRS
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