Geneva Bop Talks Suspended Till June 30

Indias balance of payments consultations meeting was suspended till June 30 after talks in Geneva under the World Trade Organisation (WTO) failed to reach any final conclusion over Indias phaseout period for removal of all import curbs.

Sources in Geneva told Business Standard that a sharp divide had emerged over Indias proposed phaseout plan with several developed countries refusing to accept the nine-year period while certain developing countries supported it.

Among the developed countries which found Indias phaseout plan unacceptable were the United States, Canada, Japan, all the members of the European Union, Switzerland, Norway, Australia and New Zealand.

The developing countries who supported Indias plan included Brazil, Egypt, Nigeria, El Salvador, Pakistan and Sri Lanka. The developing countries were in agreement with Indias whole approach which emphasises the need for economic stability.

 

A WTO spokesman in Geneva told Business Standard: This should not be perceived as a stand-off between developing and developed countries. The discussions broke down over the time frame. He added that more time had been given for reflection.

Sources said that certain countries had made it clear that they would reserve their rights on Indias proposal and could move WTO dispute settlement if necessary. As the process works, the committee attempts to reach any decisions by consensus.

Last month, India tabled a proposal which commits to phasing out restrictions on 26 per cent of the items in the first three years (starting April 1997) ending in the year 2000, 46 per cent in the next three years ending in the year 2003, and the balance over the next three years ending in 2006. The Indian offer to remove all curbs in three phases - 3, 6 and 9 years - is heavily backloaded in terms of the sensitivity and importance of items to the other major trading partners.

The International Monetary Fund, based on whose recommendations the committee determined whether a balance of payments problem exists or not, has clearly said that India has no balance of payments problems and hence has no justification for carrying on with these restrictions any longer. It is of the view that India can phase out these restrictions over the next two years. The IMF recommendation is however not binding.

Sources said that several products of interest to the developed countries were to be freed for imports towards the end of the proposed phaseout. In particular, several agricultural items are of interest to Australia and New Zealand. Other sensitive items like consumer electronics and SKD/CKD kits for cars of interest to the EU and Japan are among the items proposed to be opened up in the last phase.

Meetings in Geneva, sources said, will continue between Indias permanent mission and other delegations. Sources said that it was likely that India would seek another brief from the Cabinet.

Sources pointed out that in effect India has already had almost a two-year transition period since the first round of talks in November 1995. At that time, India had been given another year till November 1996. This meeting was postponed to January 1997. In January, India sought further time since it was unable to indicate a phase out plan without the required Cabinet clearance. It was, then, given time till this June.