US disputes India's stand on farm sector, drags in EU too

The United States today disputed India's stand that its proposal for reduction in trade-distorting domestic support for the agricultural sector did not amount to "real cuts".

"Look at the numbers and the categories of support and how much we are proposing to reduce. They are real cuts which will impose restrictions on our trade programmes," J B Penn, under secretary, US department of agriculture told reporters on the sidelines of a seminar organised by the Indo-American Chamber of Commerce.

Maintaining that it was optimistic about a breakthrough in agriculture before Hong Kong, the US said a lot depended on the European Union coming up with an improved proposal.

Commerce and Industry Minister Kamal Nath had a different take on the issue. "What the US had proposed last month are not real cuts. It would still allow them to raise trade-distorting subsidies to their farmers. The real cuts would be when there is decline in the support provided by the US treasury," he said at the seminar.

Nath said the contentious issues in agricultural trade at the WTO included differences in perception of what India and US considered to be trade-distorting support and what was allowed under the green box, which was non-trade distorting.

Penn said the "bold and ambitious" proposal presented by the US was contingent on increased market access for its goods. "The proposal has been painful politically," he said, admitting that Commerce and Industry Minister Kamal Nath too had concerns about Indian farmers along with the EU's concerns about its French farmers.

While the G-20 proposal was constructive and Australia and the G-33 had put forward some ideas, the EU's proposal of October 28 was tepid and very disappointing, Penn said.

"The world is now looking at EU to come up with improved proposals... So that the Doha round could move forward," he said, adding that he remained optimistic about Hong Kong.

Addressing the seminar, Penn said developing countries should focus on three areas to benefit from trade liberalisation, namely regulatory frameworks especially sanitary and phytosanitary issues, institutional market infrastructure and human or organisational capacity.