"US has proposed Swiss formula for tariff reduction in agriculture, which is not acceptable to us," official sources said. Swiss Formula results in reduction of higher tariffs more steeply than the lower tariffs.
As developing countries generally have higher tariffs than developed countries, application of Swiss Formula would imply 'more than full reciprocity' rather than 'less than full reciprocity' as laid down in the July Framework.
This would lead to developing countries giving more market access than developed nations. India would prefer a Uruguay Round type formula or one with a strong harmonising element as it could address, to an extent, its sensitivities.
The July package states that tariff reductions will be made on the basis of a tiered formula, with items falling in different tiers being treated differently. It, however, does not specify how reductions would be made within the different tiers.
WTO farm talks are likely to gain momentum during the next meeting of the Committee on Agriculture scheduled in the first week of July. Some of the key grouping like FIPS are also likely to meet in London ahead of the mini-ministerial in Beijing later in the month.