India says no to farm, Nama proposals

The rejection essentially reflects concerns of developing countries and implies that negotiators will have to work harder to achieve some consensus before a proposed ministerial meeting of WTO members in June-end.

Speaking to reporters today, Commerce Secretary Gopal K Pillai said the agriculture text proposals on the special safeguard mechanism (SSM) were not acceptable to India. "The paper talks of a maximum of three to eight products on which the SSM can be made applicable. Let there be no deal but India will not accept this," he said. A country can use the SSM to impose up to 50 per cent additional import duty on farm products which have seen a surge in imports.

India wants that a 5-10 per cent surge in imports as well as a price dump of the same range because of imposts should be allowed as SSM triggers.

Pillai said India was comfortable with proposals on special products (selected farm goods with lesser duty cuts) as well as reduction in trade-distorting subsidies, but these would need further discussion in the coming weeks. The main bone of contention here is the farm subsidies given by the United States on which developing nations like India want at least a 75 per cent cut. The present proposals call for a 66-73 per cent cut, which will translate into a subsidy cap in the range of $13-16 billion.

The number of square brackets (figures which are yet to be finalised) have come down from 130 in the February text to around 30, which shows that a fair amount of ground has been covered.

However, on Nama, the square brackets have been increased from 15 to 97. "The chair has made a lot of simple issues complex. This happened because there is an attempt to give selective care outs to developing countries. His is like a deliberate attempt to break developing country groups like Nama-11," Pillai said.

India feels the paper goes way beyond the agreed Hong Kong mandate on many issues, which the country will oppose tooth and nail. One issue is providing different flexibilities (selected industrial products with lesser duty cuts) to developing countries which agree to different levels of duty cuts. Effectively, a developing country which effects a lesser duty cut will get more flexibilities.

"All developing countries will have to get the same level of flexibilities. This is what was agreed in the Hong Kong ministerial," Pillai said.

Industry body Ficci and CII expressed disappointment and concern on the draft texts.