Safeguards deal rift jeopardises Doha trade talks

  • 30/07/2008

  • Business Standard (New Delhi)

D Ravi Kanth / Geneva July 30, 2008, 0:18 IST The battle to conclude negotiations for Doha in agriculture and market-opening for industrial products broke down due to unbridgeable differences between India and the United States over the trigger and remedy for using the Special Safeguards Mechanism (SSM) by developing countries to check sudden surges in imports of vulnerable farm products. After 12 days of intense negotiations, Commerce Minister Kamal Nath and his US counterpart US Trade Representative Susan Schwab failed to agree on a figure for using the SSM. India proposed that if imports cross 115 per cent over a base period, it should be allowed to impose safeguard duties that are 25 to 30 per cent over its bound duties on products taking zero cut. The US, however, refused to come down below a 140 per cent trigger as proposed by the World Trade Organisation (WTO) Chief Pascal Lamy in his draft text issued last Friday. "We had never accepted Lamy's proposal on SSM," Nath told Business Standard, arguing that he cannot be blind to the concerns of India's farmers if they are faced with a sudden import surge. With both sides showing no signs of movement, the WTO chief is left with no option but to conclude the meeting without a result. A statement will probably be issued to say that work will continue in September, a soft-landing strategy as they call it in global trade negotiations when they collapse without an agreement. Apart from SSM, the US also failed to address the other big issue revolving a reduction in cotton subsidies, the trade minister said. "It is not a battle between India and the United States," said India's ambassador Ujal Singh Bhatia. He argued that the issues India raised are vital for about 100 developing countries that rallied behind India's demand. "A majority of developing countries wanted a framework on special safeguard duties that can be easily used while some dozen farm exporters led by the United States attempted to restrict the SSM framework," said Ambassador Bhatia, suggesting that it is wrong to paint the battle as one between India and the US. In fact, there are other big issues like cotton, the tariff formula in the Non-Agricultural Market Access (NAMA) agreement that ought to have been resolved instead of focusing all energies on SSM, Malaysia's trade minister Mari Pangestu told Business Standard. "Cotton is the biggest issue that was not addressed and it is wrong to say that SSM was the main issue," she said. New Zealand's trade minister Phil Goff expressed sharp disappointment that the negotiations are stuck on SSM saying that while he, representing a farm exporting country, is prepared to agree on a framework to address surges in imports, it cannot be a "loose and generalized framework". In a way, the success of the Geneva mini-ministerial meeting depended on two individuals