No compromise on farm subsidy, says Nath

India has agreed to work for better trade ties with the European Union. At the same time, it has ruled out any compromise on agriculture subsidy at the WTO talks.

"We want to work more closely with the EU, our biggest trading partner, both to boost investment and to enlarge the volume and range of trade," Commerce Minister Kamal Nath told reporters here last night after his talks with EU Trade Commissioner Peter Mandelson.

However, he said "India cannot compromise and move forward in the WTO talks merely to meet the deadlines".

But, he made it clear that in the WTO talks India would not move merely to meet the deadlines. "India cannot compromise and move forward in the WTO talks merely to meet the deadlines, though we understand deadlines are important," he said, adding "there cannot be a compromise on agriculture subsidy."

At the end of their talks covering bilateral and WTO issues, Nath and Mandelson issued a joint statement in which they said they would agree on a basis for bilateral negotiations aimed at closer economic cooperation by October, when an EU-India summit takes place.

"Following our meeting today, our officials will discuss how to ensure that by the time we get to the EU-India summit in October 2006, we have a clear road map of how our bilateral trade and investment agenda can be strengthened and we have an agreed basis on which to start bilateral negotiations towards closer economic co-operation," the joint statement said.

After the meeting, Mandelson said "we have both said our priority is the Doha development agenda and that will be especially true in the coming months. The EU's ability and determination to build the bilateral relationship is not designed to exclude other relationships with WTO members."

India, like the EU, hopes the Doha round will bring down barriers to trade in services that could benefit its booming services industry, including call centres and outsourcing.

Answering questions on his talks with Mandelson, Nath said, "the discussion centred on where the convergence is and where the divergence and what is the divergence between the EU and the USA."