The battle to conclude negotiations for Doha in agriculture and market-opening for industrial products broke down due to unbridgeable differences between India and the United States over the trigger and remedy for using the Special Safeguards Mechanism (SSM) by developing countries to check sudden surges in imports of vulnerable farm products.
After 12 days of intense negotiations, Commerce Minister Kamal Nath and his US counterpart US Trade Representative Susan Schwab failed to agree on a figure for using the SSM.
India proposed that if imports cross 115 per cent over a base period, it should be allowed to impose safeguard duties that are 25 to 30 per cent over its bound duties on products taking zero cut.
The US, however, refused to come down below a 140 per cent trigger as proposed by the World Trade Organisation (WTO) Chief Pascal Lamy in his draft text issued last Friday.
"We had never accepted Lamy's proposal on SSM," Nath told Business Standard, arguing that he cannot be blind to the concerns of India's farmers if they are faced with a sudden import surge.
With both sides showing no signs of movement, the WTO chief is left with no option but to conclude the meeting without a result. A statement will probably be issued to say that work will continue in September, a soft-landing strategy as they call it in global trade negotiations when they collapse without an agreement.
Apart from SSM, the US also failed to address the other big issue revolving a reduction in cotton subsidies, the trade minister said.
More From This Section
"It is not a battle between India and the United States," said India's ambassador Ujal Singh Bhatia.
He argued that the issues India raised are vital for about 100 developing countries that rallied behind India's demand.
"A majority of developing countries wanted a framework on special safeguard duties that can be easily used while some dozen farm exporters led by the United States attempted to restrict the SSM framework," said Ambassador Bhatia, suggesting that it is wrong to paint the battle as one between India and the US.
In fact, there are other big issues like cotton, the tariff formula in the Non-Agricultural Market Access (NAMA) agreement that ought to have been resolved instead of focusing all energies on SSM, Malaysia's trade minister Mari Pangestu told Business Standard.
"Cotton is the biggest issue that was not addressed and it is wrong to say that SSM was the main issue," she said.
New Zealand's trade minister Phil Goff expressed sharp disappointment that the negotiations are stuck on SSM saying that while he, representing a farm exporting country, is prepared to agree on a framework to address surges in imports, it cannot be a "loose and generalized framework".
In a way, the success of the Geneva mini-ministerial meeting depended on two individuals — India’s commerce minister Kamal Nath and the United States Trade Representative Ambassador Susan Schwab — representing, respectively, an emerging country with a huge rural population and the world’s sole superpower.
The powerful commodity lobbies in Washington along with the aggressive farm exporting countries led by Australia are goading Schwab to a fight to the finish.
On the other hand, Nath faces an acid test from India’s politically powerful farm lobby which will not pardon the government if it is remotely seen to be bartering their livelihood and survival concerns.
Caught between these two polarised forces, the US and India were unable to make any progress.
Though India showed flexibility to move away from its entrenched positions by agreeing to a compromise proposal floated by Lamy on Monday, the US trade representative is not budging from its position that the final agreement on its terms.
Faced with the political standoff between the two economic giants, Lamy circulated a compromise proposal that did away with triggers and remedies altogether.
The latest suggestion mirrors a simpler safeguard now allowed for industrial nations with a set of operational conditions. It would require members to inform the WTO 20 to 30 days following its use, after which a special panel would study the merits of the proposed safeguard action.
But Schwab rejected the new proposal, saying she would insist instead on a trigger of around 150 per cent to adequately address the issue.
Nath said he would accept the latest Lamy proposal as a basis for negotiation because it would go into effect if there were a sudden surges in imports.
The two sides met for several hours in different configurations, including one-on-one meetings with Lamy but there was little progress.
There was, however, progress in other areas such as market-opening for industrials and services but no conclusive agreements yet.