With the European Union and the United States closing ranks on pushing for a Swiss formula with two co-efficients for reduction in industrial tariffs, India on Friday said it would not agree to any proposal unless the flexibilities offering less than formula reduction or not reducing tariff on certain lines were included.
Commerce and Industry Minister Kamal Nath also wrote a letter to WTO Director-General Pascal Lamy on Friday afternoon, stating that India would not budge on agricultural and industrial tariff negotiations unless developed countries agreed on an end date for elimination of export subsidies, special products and special safeguard mechanisms in agriculture and flexibilities on Para 8 in industrial tariffs.
India and the WTO: News and Issues
Officials said since even developing countries had offensive interests in India's market, New Delhi may have to contend with flexibilties being provided as part of the formula rather than as a stand-alone provision.
Earlier in the day, EU Trade Commissioner Peter Mandelson said, "Last night, the US made a proposal and I second it in every respect." He said the US and the EU proposal, as it is now called, was backed by a majority of the countries that were present.
A US official said the US continued to support a Swiss formula with two coefficients in Nama and added that the EU, too, shared that position.
Nath said developing countries needed flexibilities to protect their domestic industries, such as offering less than formula reduction or making no reduction at all on a specified number of tariff lines covering their sensitive items or sectors.
While India toughened its stance, Mandelson said the EU was not willing to discuss dates for the elimination of export subsidies until other countries sign up for transparent reform to their forms of export subsidies.
In a statement, the EU said Europe's commitment to eliminating all export subsidies in an unequivocal and transparent way remains absolute. But every form of export support distorts world markets and the need to act applies to all governments engaged in export subsidisation.
Mariann Fischer Boel, EU Agriculture Commissioner, said, "We are ready to move, but we insist on taking others like the US, Canada, Australia and New Zealand along with US. A date for ending export subsidies is not a trade-off for transparent commitments to reform export subsidy programmes."
These commitments are what others owe to all members of the WTO as part of their commitment to ending export subsidies in the July Framework Agreement of 2004."