The United States yesterday applied strong pressure tactics at the mini-ministerial meeting of the World Trade Organisation (WTO) by blaming India and China — the two biggest emerging economies — for creating obstacles in establishing modalities for the Doha Development Agenda in agriculture and market-opening for industrial products.
The US accused China and India of not agreeing to the language proposed by WTO Director-General Pascal Lamy over sectoral tariff elimination that would require members to bring import tariffs on agreed items to zero.
The Doha mandate stipulated that the sectoral tariff elimination must be voluntary and not mandatory. However, the WTO chief proposed language on sectoral tariff elimination that makes it almost mandatory for developing countries as proposed by the US and its allies.
Over the last 48 hours, the US has heaped criticism on China for not agreeing to lower duties on rice, cotton and sugar, which are heavily subsidised by the US administration.
China’s Ambassador Sun Zhenyu sharply criticised the US for “finger-pointing” when ministers are concluding the modalities. China said it not only cut tariffs steeply during its accession to the WTO but also took on new commitments to provide enhanced market access.
“If they keep putting threats on developing countries, I think we are going nowhere,” the Chinese ambassador said.
India said it is “unfair” of the US to blame the two countries, suggesting that Lamy’s text is not a take-it-or-leave-it text. Trade envoy Ambassador Ujal Singh Bhatia said India cannot accept dilution of special safeguard mechanisms (SSM) as proposed in the Lamy text.
Meanwhile, the battle over “special” products’ designation for developing countries outlined in a proposed compromise in the Doha agriculture modalities on Friday by Lamy faced some tough opposition.
A proposal issued by a 100-plus informal coalition of the G-33, the African Group, African/Caribbean/Pacific grouping and small and vulnerable economies demanded that 15 per cent of farm tariff lines be allowed to be designated “special” products, against 12 per cent in Lamy’s draft.
The coalition, spearheaded by Indonesia and India, suggested that the average cut for “special” products should be 9 per cent against 12 per cent in the Lamy draft, with 5 per cent of tariff lines eligible for zero cuts.
Meanwhile, Commerce Minister Kamal Nath told reporters that India is not alone in demanding improvements. Instead of the 40 per cent trigger for special product farm tariff lines with zero cuts in the Lamy draft, the developing country coalitions demand there should be the same triggers for products taking tariff cuts as those not subjected to tariff reductions.
They also demanded that the “remedy” should be 30 per cent above current bound levels — with 7 per cent of tariff lines eligible.