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Rediff.com  » Business » US must cut farm subsidies further: India

US must cut farm subsidies further: India

By Ajay Kaul in Helsinki
October 12, 2006 18:17 IST
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India on Thursday said it would respond constructively to any dialogue for reviving the stalled world trade talks, provided the European Union persuaded the US to lower its farm subsidies.

"We have vested interest in Doha round, particularly if the round stays faithful to the promise of making it truly a development round," Prime Minister Manmohan Singh said at a joint press conference with his Finnish counterpart Matti Vanhanen in Helsinki.

While blaming the US and EU for the stalemate, he said India would respond constructively to any dialogue on resumption of WTO talks if Brussels persuaded Washington to make deeper cuts in agriculture subsidies.

The WTO talks collapsed in July after the six key trading nations, including EU, US, India and Brazil, failed to arrive at an agreement to cut agriculture subsidies and tariffs.

While the US had proposed lowering its farm subsidies by 53 per cent, developing countries led by India contended that it will still give Washington the flexibility to increase its actual farm support from $19 billion last year to up to $23 billion.

The EU had agreed to cut its farm tariffs by 51 per cent, which was closer to developing countries demand of 54 per cent. But the US wanted the 25-nation bloc to reduce tariff by 66 per cent.

"As developing countries have special interest, we too have special interest in a rule-based multilateral system where might is not right," Manmohan Singh said after an hour-long meeting with Vanhanen during which the two leaders discussed bilateral issues.

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Ajay Kaul in Helsinki
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