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Rediff.com  » Business » Developing countries cold to Lamy's 'freeze' proposal

Developing countries cold to Lamy's 'freeze' proposal

August 14, 2008 02:20 IST

Several developing countries are expected to oppose a proposal by World Trade Organization chief Pascal Lamy to "freeze" the issues on which there is convergence within the Doha Development Agenda and resolve the outstanding issues, Business Standard was told.

Lamy, who is visiting New Delhi, is understood to have campaigned for this with Indian leaders and has sought to know if India is ready to send its senior officials for a meeting next month. But India and other developing countries have rejected the proposal to "lock in" the areas of convergence on the ground that it will amount to "pocketing" the gains while leaving most of their concerns in the bracketed terrain of unresolved issues.

"Effectively, the idea will result in leaving the developing countries high and dry while the industrialised countries will be left off the hook," said an Asian trade envoy.

"This is a dangerous ploy which we cannot agree to as all the issues are yet to be resolved comprehensively and there are clear linkages (between them) which cannot be ignored," said a developing country negotiator, suggesting that several developing countries have not agreed to the United States keeping its overall trade-distorting domestic supportĀ  at $14.5 billion while its current payments are just around $7.5 billion.

Further, there is a clear linkage between the flexibilities sought by the industrialised countries with regards to OTDS, product-specific cuts for farm products, cotton, tariff simplification, and tariff rate quotas for sensitive farm products and what is being proposed in the Doha market access for industrial goods, said a South American trade envoy.

India did not agree to many of the issues in the G-7 meeting such as the OTDS and the sectoral tariff elimination for industrial goods and so it is wrong to say there was convergence within the G-7, said a trade negotiator.

Apparently, India assured Lamy that it was ready for any meeting to convene the talks but cautioned him that everything should be left on the table for further discussions.

Meanwhile, Lamy's "freezing in" proposal was echoed in the report presented by the controversial chair for Doha negotiations on industrial goods, Ambassador Don Stephenson, who showed the areas of convergence as well as those requiring more work.

In sharp contrast to the report presented by the chair for Doha agriculture negotiations, who called for more work on all the issues, Ambassador Stephenson said there was "substantial convergence" on a number of elements such as the range of coefficients to be used in the formula to cut industrial tariffs.

Stephenson had suggested a coefficient of eight for the industrialised countries, and a range of 20, 22 and 25 for the developing countries with corresponding flexibilities to cut down their industrial tariffs.

Argentina, however, rejected the numbers on the ground that they undermined the principle of less-than-full reciprocity which requires the industrialised countries to undertake bigger commitments than the developing countries.

Had it not been for the stalemate in agriculture that led to the collapse of the ministerial on July 29, the members would have made progress in finalising the non-agriculture market access (Nama) package, except for one or two issues, the chair suggested in his report to the trade negotiations committee.

"However, this convergence was conditional on agreement on a number of elements in the negotiations on agriculture, and was accepted by many of these members only 'as a package'," said Ambassador Stephenson.

D Ravi Kanth in Geneva
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