TWN Info Service on WTO Issues (July04/18)

27 July 2004

Third World Network



Report by Goh Chien Yen, TWN, Geneva 27 July 2004


The Indian Commerce Minister Mr. Kamal Nath gave a press conference at the WTO at noon.

He said the 16 July draft was “disappointing” but said he looked forward to the problems being ironed out and for the developed countries to comprehend the concerns of developing countries.  He stressed that it would be unfair for countries that are trade distorting in agriculture export and domestic subsidies, to insist that developing countries open their markets as a condition for reducing their subsidies.  He said the discussions over the last couple of days have not led to any movement forward.  “But let’s see what the revised text will say tomorrow,”he concluded.

Below is a summary of Kamal Neth’s remarks.

Opening remarks by Kamal Nath

We have the text of 16 July which was disappointing. From 16th July, heads of delegations and technical staff have met with each other hoping to iron out some of these concerns we have and some difficulties we have in various aspects of the text. The revised text is scheduled tomorrow. We have a G20 meeting today, in which we shall be addressing concerns which already have been expressed at the level of heads of delegations and the technical staff over the past few days.

We are looking forward to an agreement. We are looking forward to the ironing out of these concerns, in having a better balance. In the last two months, the G20 which is a diverse group has an understanding which has been conveyed in the various FIP (five independent parties) meetings in Paris and Sao Paulo.

This is the first time where the G20 will be meeting where there is a text on the table. Up to now, G20 had made a paper in Sao Paulo, but this is the first meeting where there is text. Which I hope will only be a starting point.  We have expressed concerns in the more contentious issue of agriculture, in the imbalance. One of the points I would like to emphasise is that within the three pillars, one pillar is not for trade off with the other pillars. There should be movement on all three pillars, there should be no issue on that.

For developing countries which have neither forward or backward to go in domestic support and export competition, I think it is erroneous to try to link movement in domestic support and export competition with movement in market access. Where market access is concerned, we are willing to move forward in proportionality with the developed countries.

The developing countries do not have anything to move on domestic support and export competition, that should not be construed to mean that there is a trade off on movement in that with developed countries with market access. Each pillar should have the same intensity and specificity. Movement by both developed and developing countries should be in proportionality in market access. I don’t think that there is an issue. But one point I would also like to make is that the WTO is about free trade, level playing field and fair competition, and not about artificial prices, composed of subsidies and supports.

We are talking about market access of products not about market access of subsidies and support. Because that is then an artificial situation.

Replies during Q and A

Sensitive products mean different things to different countries. In India, where you have subsistence and survival farming, sensitive products have a completely different meaning from what they mean in the European Union. In the current draft sensitive products have been addressed for the developed countries, but have been left very open ended for developing countries. We feel that sensitive products for developed countries should be within the overall band, not stand-alone.

We are talking about a framework agreement at the moment, and a framework agreement which lays down sound principles would a be a good framework and will be a step forward, may not be a leap forward but even a step forward in agriculture is a big leap forward in the MTS. Where special products is concerned, principles should be aid out with the same level of specificities for developing and developed countries. We would not be happy with the situation where the specificities are laid out for sensitive products for developed countries and remains very open ended and a statement of good intention for developing countries.

I am not looking for failure. I am looking at next 3 days with optimism that the concerns of the developing countries can be comprehended by the developed countries.

On the sectoral approach in NAMA, we are not against it in principle. But this cannot be mandatory. We can pursue this without making this approach mandatory.

Where domestic support and export competition (in agriculture) are concerned these are trade distortions. Now to correct trade distortions, it would be very ill founded for a country to argue that it is willing to do the right thing (i.e, to reduce subsidies) only it is able to get market access.  One cannot compare trade distortion with a legitimate tariff barrier, because these trade distortions lead to artificial prices. The prices of agricultural products have heavy components of subsidies and support, that is not what the WTO is all about.   It is very very ill conceived and ill founded that movements on export competition and domestic support are contingent upon market access, but within market access we are certainly willing to move forward in proportionality to what the developed countries are willing to move. There is no issue on that.

Discussions over the last couple of days have not led to any movement forward. But let’s see what the revised text will say tomorrow. 

This is a framework agreement. If there is a sound set of principles from which will flow formulations in the future, that is what framework is all about. Less ambitious is perhaps an inappropriate word, I would say not less ambitious but more balanced.