India raised sharp concerns during a meeting of senior trade officials from the Group of Seven (G-7) members that was called ostensibly to break the deadlock over the special safeguard mechanism (SSM) for developing countries that led to the collapse of the Doha trade negotiations in July, Business Standard was told.
After four days of intense negotiations among the G-7 — the United States, the European Union, India, Brazil, Japan, Australia and Brazil — India maintained that it would consult the ideas proposed by the US, Australia and Brazil with its domestic farm constituencies before finalising any decision.
India also maintained that it could not give any acceptance to the ideas without discussing them will all its partners in the G-33 coalition.
The seven countries made little progress on the special agricultural safeguard mechanism to contain unforeseen surges in imports.
The issue is how to factor the rising imports of farm products in developing countries into the trigger that can be applied in the special safeguard to curb unforeseen surges in imports.
The US and Australia insisted that the only way to ensure that normal trade was not disrupted by the use of the SSM was through a growth factor that took into consideration the rising demand due to increased incomes and growing populations in developing countries.
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The farm exporting countries suggested that a growth factor of around 20 per cent should be built into the trigger mechanism to ensure that normal trade was not disrupted. With a growth factor of around 20 per cent, the trigger to clamp on imports would require an increase of over 140 per cent over a three-year period, analysts said.
During the marathon sessions over the last four days, the discussion on the need for a built-in growth factor in the trigger mechanism to accommodate the demands of the US and Australia dominated the proceedings.
India said the proposal to build a growth factor in the construction of the trigger mechanism, as suggested by the US and Australia, was inconsistent with the Doha mandate.
Without a growth factor built into the trigger, it would be difficult to ensure that the SSM would not curb normal trade, the US repeatedly argued.
China vehemently opposed the specific US-Australia proposal that calls for a built-in growth factor over a three-year rolling period, multiplying it with numbers agreed for the trigger.
India suggested the proposal was not consistent with the Doha Development Agenda architecture and asked if a similar framework was followed in the long-established special safeguard for industrialised countries.
China and India said a trigger of around 120 per cent would take care of normal growth in farm products, which is now 5-7 per cent. They warned that developing countries could not be expected to wait until their domestic agriculture was wiped out by imports.
At the failed July mini-ministerial meeting, India and China had demanded a trigger of 110 per cent increase in imports while the US and Australia were unwilling to come down below 140 per cent.
The seven members also made little headway on how to address the issue of tariff simplification. The EU said it could not convert all its complex farm duties — no more than 80 per cent — to ad valorem tariffs because of fierce resistance from its member states.
India and China said there should be full conversion — as is the case in the Doha non-agricultural market access negotiations.