India applauds Doha's death By Paranjoy Guha Thakurta
NEW DELHI - Setting aside ideological divisions, local observers have endorsed
the government's decision to quit the Doha Round of the World Trade
Organization (WTO), rather than compromise on the West's agricultural
subsidies, which endanger the livelihoods of hundreds of millions of farmers in
India and other developing countries.
The Doha Round of talks officially collapsed on Monday in Geneva at a meeting
among representatives of the G6 countries (Australia, Brazil, the European
Union, Japan, India and the
United States) and the WTO director general Pascal Lamy when the US refused to
bring down subsidies for its farmers.
The EU was willing to make substantial cuts, but much time was spent discussing
the key US demand - the lowering of import duties on agricultural as well as
non-agricultural products.
Bitter bickering followed the failure of negotiations. EU trade commissioner
Peter Mandelson has been quoted as saying Washington was asking "too much from
others in exchange for doing too little themselves - this is not my definition
of leadership". The US described these allegations as "false" and "misleading".
When asked how long it would take for the WTO negotiations to resume, India's
Commerce Minister Kamal Nath said: "It could take anywhere from months to
years. Unfortunately, one member [the US] is unable to make any effective
reduction in trade distorting subsidies, but at the same time is insisting that
developing countries open up their markets to provide access to their
subsidized products."
India is now seeking alternatives to talks at the WTO in bilateral trade
agreements with various groups of nations. Nath said in parliament: "To address
India's core concerns and interests, including protecting the interests of
farmers, we have formed alliances with like-minded developing countries,
including the G20 [Group of 20 developing countries] on agriculture and the G33
on special products and the special safeguard mechanism, and the NAMA-11 [or
the 11 countries involved in negotiations on Non-Agricultural Market Access] on
industrial tariffs.
"Specific and detailed proposals have been made by these groups in the
negotiations. India has also been playing a key role in further strengthening
developing country coalitions by bringing together G20, G33, the African group,
ACP countries [African, Caribbean and Pacific countries associated with the
European Union] and the LDCs [least developed countries] to reinforce [one
another's] position on issues of mutual interest."
What Nath is alluding to is simply that the rest of the world seems united in
opposing the US for its refusal to cut farm subsidies.
"It's 2% of the American population or less than 6 million farmers versus at
least half the rest of the world or three billion people who depend on
agriculture for their livelihood, including more than 60% of India's population
or 600 million people in this country alone," Biswajit Dhar, head of the Center
for WTO studies at the Indian Institute of Foreign Trade in New Delhi, told
Inter Press Service (IPS).
Not just academics, representatives of business associations also support the
Indian government's position.
"It is rare that one sees 100% consensus in a democracy like India, but on the
question of farm subsidies the country appears completely united," Vivek
Bharati, national policy advisor to the Federation of Indian Chambers of
Commerce and Industry (FICCI), told IPS.
At the same time, analysts argue that the dispute over farm subsidies is
unlikely to have a negative effect on India's trade relations with the US.
Speaking to members of the American Chamber of Commerce in New Delhi this week,
Geoffrey Pyatt, charge d'affaires of the US Embassy in New Delhi, said: "The US
is disappointed that the G6 was not able to reach an agreement on the Doha
Round. We went to Geneva prepared to reach an agreement that would benefit all
economies and lead to a significant reduction in poverty around the world.
President [George W) Bush has repeatedly said that the US is ready to eliminate
tariffs, trade-distorting subsidies and other barriers to the free flow of
goods and services as other nations do the same."
However, the US has come in for severe criticism in India and elsewhere for its
intransigence on the issue of reducing subsidies to its farmers.
John Samuel, international director of the international development agency
ActionAid, was quoted in an IPS report as saying, "The interests of 90% of poor
farmers were being threatened for the sake of 2% of the rich farmers." The
deadlock marked only a "semicolon in the process of multilateral world trade
talks, not a full stop", he said.
Bharati contends that Indian agriculture could become internationally
competitive only if there was a level playing field.
"More than even export subsidies, domestic subsidies in the US are distorting
trade in agricultural commodities, making its impossible for developing
countries like India to compete on an equal footing," he said.
In the Hong Kong ministerial meeting of the WTO as well as at Doha, it had been
clearly recognized that developing countries would receive "differential
treatment" even as far as NAMA is concerned, he added.
"In this battle of unequals, developed countries should first open their
markets to labor-intensive products in which developing countries have
competitive advantage," said Bharati who represents one of India's largest
business associations.
Developed nations were raising issues relating to average customs tariffs
whereas the key disputes concerned peak tariffs not average tariffs, he said.
Dhar illustrates the point by highlighting how exports of buffalo meat from
India to the US attract customs duties as high as 400%.
"As far as agriculture is concerned, India's concerns go far beyond trade -
it's a question of the country's food security and the livelihoods of hundreds
of millions of farmers here," he said, adding that Nath has no choice but to
take the stance he has, despite the minister's reported preference for free
market-oriented policies.
"The US preaches the virtues of free-market capitalism to the rest of the world
but the question that arises is: what is the role of subsidies in a free market
economy?"
The subsidies received by each and every cow in Europe would enable the animal
to fly business class around the world each year, he pointed out.
India's position on farm subsidies is a consequence of the current crisis in
the country's agriculture sector. More than half of India's one billion-plus
population depends on agriculture though the sector's share in the national
gross domestic product has declined to 20% from 40 percent over the last
decade.
In recent years, India's agricultural production has been increasing by less
than 2% a year whereas the economy as a whole has been growing by 8%. India's
federal Agriculture Minister Sharad Pawar confirmed in May that between 1993
and 2003, at least 100,000 farmers had killed themselves because of their
inability to repay loans.
The Indian media continue to regularly report on suicides in the Vidarbha
region in the western part of the country, where 655 farmers in the last two
months alone have killed themselves, mostly by consuming pesticides. Prime
Minister Manmohan Singh recently visited the region to commiserate with
farmers. Pawar has gone on record stating that as many as 16,000 farmers
continue to commit suicide each year in 32 vulnerable districts in western and
southern India in the provinces of Maharashtra, Andhra Pradesh, Karnataka and
Kerala.
"The Indian government's decision to refuse to negotiate further on the issue
of farm subsidies was a correct one," Dhar said. "What was on offer in the
negotiations was way below our minimum expectations. No deal is better than a
bad deal."
The total quantum of farm subsidies given by the developed OECD (Organization
of Economic Cooperation and Development) countries works out to $340 billion a
year or almost $1 billion a day, he said.
Bharati added that negotiating new issues at the WTO is meaningless since
developed countries led by the US are refusing to stick to commitments made in
the past. "The Doha Round made development its centerpiece, but the American
position on agricultural subsidies has virtually signaled the end of
negotiations."
