WTO puts agri talks on hold

NEW DELHI: With key WTO members including the EU, the US, India and Brazil continuing to engage in a fierce battle over agriculture tariffs, subsidies and special products, the chairman of the WTO committee on agriculture has decided to suspend further negotiations till things improve. The chairman, in a note circulated to all members, has said that he will wait for WTO director general Pascal Lamy to help members arrive at some kind of a compromise before he resumes negotiations in the committee.

The letter said that the decision was taken in order to give “sufficient time and space” for the wide-ranging consultations now being undertaken by Mr Lamy. The WTO DG, who also chairs the trade negotiations committee (TNC) — the top-most negotiating committee of the WTO — was instructed by the TNC on July 1 to hold the consultations following the abrupt and inconclusive end to the mini-ministerial meeting of WTO members in Geneva.

Members had gathered in Geneva in an attempt to thrash out an agreement on bringing down agriculture subsidies and tariffs in both agriculture and industrial products. A week after the meeting ended, members have not yet shown any sign of reconciliation. If anything, matters have moved from bad to worse.

The US, which was being viewed as the main culprit behind the failed talks by a number of developing countries and the EU, seems particularly ruffled. In a press conference back home, US trade representative Susan Schwab said that the US was simply not undertaking by itself cuts in domestic support for agriculture. The US has said that it cannot make any counter-proposal because offers made by the others, including the EU, Brazil, Japan and India, did not meet the US market access standards.

India, on the other hand, maintains that it would not settle for any compromise in the area of special products and any agricultural product which could affect the livelihood or food security of Indian farmers would not be liberalised. The US wants to limit the number of special products to five tariff lines.

The negotiations on a multilateral agreement on agriculture and industrial products broke down in Geneva when the US refused to improve its offers in reducing agriculture subsidies (currently at about $19.5bn annually) till the EU agreed to cut down agriculture tariffs by 64%.

The EU, which showed some flexibility in the talks, agreed to improve its tariff reduction offer from 39% to about 51%. The US, however, argued that it was not enough and said that there were no chances of it agreeing to a 75% reduction in its agriculture subsidies.