Another failure

Yet another mini-ministerial meeting on the vexed WTO trade liberalisation talks, held in Geneva last week, has failed to end the impasse. This was as expected, considering the inadequate spadework done by the WTO secretariat prior to the meeting. What was not anticipated was the way the five-day meet would end abruptly on the third day, with India's Commerce Minister Kamal Nath walking out in a huff. He also sought initially to convey the impression that the Doha round was virtually doomed but clarified later that India wanted the discussions to continue so as to achieve a convergence of views.

While Mr Nath's handling of matters can be questioned, the blame for the fiasco at Geneva falls squarely on the US and the European Union (EU), both of which refused to offer any more cuts in subsidies without countries like Brazil and India further opening up their agricultural, industrial and services sectors to them. What also needs to be realised is that the 72-page draft handed out to the 60-odd negotiating trade ministers by the WTO secretariat was inherently flawed and should not have been expected to pass muster. For, it read more like a document of dissent rather than agreement, containing as many as 760 "brackets", each referring to an issue on which there was no consensus. As such, this version was almost twice as problematic as the one considered at the failed Seattle ministerial meeting, which had 402 brackets.

Worse still, the WTO draft was seen by the developing countries as an attempt to divide them by proposing a separate set of tariff reduction commitments for the poorer countries. As such, it tended to treat countries like India and Brazil, which are spearheading the campaign for protecting developing countries' interests, on a separate pedestal with China in view of their higher stage of development. Even more appalling was the subtle way in which the draft sought to tilt the scales in favour of the developed countries. It mooted exemption from tariff caps for the sensitive products in which the developed nations would allow only a minimum cut in duties. But it made no mention of exclusion from such tariff caps for the special products of interest to the developing countries.

In the case of non-agricultural items too, the draft tended to favour the Swiss formula, which requires the developing countries to make much steeper cuts in their import tariffs than those by the developed countries. This the developing countries could not accept. The sectoral approach suggested for resolving non-agricultural issues also went in favour of the developed economies. This was in sharp contrast to an earlier proposal by India and others that the reduction coefficient in the tariff cut formula should take into account the average existing tariff levels of individual countries so that the developing economies were not unduly penalised for their higher existing duties. Though the WTO director-general, Pascal Lamy, has now been mandated to hold intensive negotiations with the major players to thrash out a consensus, the task will not be easy if the US and the EU do not move from their present negotiating positions.