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WTO chief Pascal Lamy has asked India to give increased market access for agricultural products and contribute toward advancement of the contentious Doha Round of global trade talks.
Lamy said while special protection for India and G-33 developing countries have been secured, it "does not negate the overall objective of providing increased market access opportunities, as agreed when we launched the Round in 2001".
The WTO Director General's comments in a speech in Mexico City could indicate a message to India and other G-33 members that the protection under Special Products should not "negate" the overall market access mandate of Doha round of talks.
Commerce Minister Kamal Nath has always maintained Doha was meant to be a "development" and not "market access" round.
Under Special Products, India and many other countries would be allowed to protect vulnerable farmers from imports by keeping markets for limited items closed through higher import duties.
But the dispute revolves around the number and the types of Special Products. India wants that developing countries must be allowed not only to name these items but also set the number.
Lamy said India, Brazil and Argentina were expected to agree to cut their import duty on industrial goods as well, under the Non-Agricultural Market Access pillar of the negotiations, according to a principle which entails more cuts on higher tariff and less on lower tariff. This principle, in the WTO jargon, is called the 'Swiss formula'.
"As far as industrial tariffs are concerned, the expectation is to see large developing countries, among which some of the members of G-20, like Brazil, India and Argentina, to agree on cuts in their import tariffs," Lamy said.
While India has accepted the 'Swiss formula', it insists the co-efficient for duty reduction should be such that would mean higher cuts for rich countries and lower for developing nations.
Since average tariff in India and other developing countries is higher as compared to rich nations, the onus on more customs duty reduction would be on India. Nath, supported by Indian industry bodies like CII, FICCI and Assocham, has argued India is yet to reach level of high industrialisation.
The WTO chief also asked the US to substantially cut the agricultural subsidies so that significant advancement can be made in the tough trade talks before the end of June this year when the fast-track authority of President George Bush expires.
Under the Trade Promotion Authority, the US President can allow the administration to sign trade agreements without seeking clearance from the Congress.
"In this part of the negotiations, the ball is very much in the court of United States. The US must offer deeper cuts in its agricultural subsidies beyond its current proposal. Other countries will then follow suit," he said.
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