In a strategic move to counter what are perceived as "maximalist" positions by the United States and the European Union (EU) in the Doha industrial and services negotiations, the G-20, led by Brazil and India, clearly spelt out on what ought to be the balanced solutions "on domestic support, export credits, tariff capping, sensitive products, tariff escalation and tariff simplification", trade diplomats said.
On all these key issues in the Doha farm agenda, the US, the EU, Japan, Switzerland and Norway, among others, want "minimalist" solutions while asking the developing countries to pay a "disproportionately" high price in cutting down industrial tariffs or opening services markets, a G-20 trade envoy told Business Standard.
The underlying rationale of these proposals, which were circulated at the General Council meeting on Tuesday, is to send a strong message to "other countries and groups.
The US, for example, is reluctant to commit for ambitious cuts in what are called domestic farm subsidies, particularly subsidies on cotton.
The chairman for Doha negotiations, Ambassador Crawford Falconer, had suggested that the US should agree to bring its domestic subsidies to a level between $13 billion and $16.4 billion along with a plethora of disciplines. He had also suggested drastic cuts in the cotton subsidies on which the US had lost a major trade dispute.
In a move targeted at the US and other major farm subsidisers, the G-20 called for incorporating several changes in the Agreement on Agriculture to include overall level of trade-distorting domestic support, blue box caps and disciplines, product-specific caps at individual product level.
Concerned with the new US farm bill that entails payments of $286 billion, the coalition wants "to ensure that modalities are comprehensive, thus, including negotiating variables as well as their sources".
The coalition argued, for example, it is necessary modalities indicate the total value of agricultural production for all Members making cuts in the OTDS (overall trade distorting domestic support)".
The coalition proposed a comprehensive approach on how to address the treatment of sensitive products. "A satisfactory solution of all elements having a bearing on the final TRQ (tariff rate quotas) expansion level of products designated as sensitive is a necessary condition for a negotiation on the final level of ambition," the G-20 maintained.
Also, the industrialised countries continue to apply opaque duties such as specific, compound and mixed farm tariffs while insisting that the developing countries maintain full ad valorem duties on industrial products.
Despite demands from India and other G-20 members that all farm tariffs should be converted into ad valorem duties, the EU, Japan, Switzerland and Norway are dragging their feet, trade diplomats said.
