Like the uninterrupted snowing in Geneva for the past 48 hours, the Doha modalities negotiations too faced the prospect of a complete freeze after talks between the United States on one side and China and India on the other, came to a screeching halt on Wednesday.
Commerce Minister Kamal Nath flatly rejected “maximalist” demands made by United States Trade Representative Susan Schwab during a video conference call on Wednesday evening.
Schwab insisted that New Delhi should join zero-for-zero tariff elimination talks on chemical products and price cross-check mechanism for farm products to be subjected to special safeguard duties, trade negotiators said.
The conference call was arranged by World Trade Organization chief Pascal Lamy who is keen to host a ministerial meeting that has little or no enthusiasm among members.
New Delhi, said Nath, would never accept the unreasonable demands on sectoral tariff elimination for some industrial products and the special safeguard mechanism (SSM) for farm imports.
These two issues, along with cotton subsidies, are identified as the make-or-mar situation in the Doha modalities negotiations which would suggest the level of tariff and subsidy reduction commitments for farm products and tariff cuts for industrial products.
Schwab insisted that New Delhi should not only join the sectoral tariff elimination talks on chemicals along with two other sectors of Washington’s choice, but also accept the tariff elimination commitments in the final analysis.
The sectoral tariff elimination talks involve bringing tariffs to zero in sectors decided upon by the WTO members.
In a firm response, Nath said India’s stand on the sectoral tariff talks was guided by the Doha mandate. He said this called for non-mandatory participation. India would consider its participation without prejudice to the outcome and was not bound to accept final commitments, he added.
New Delhi, he said, would take part in good faith but would decide on its participation 45 days after the Doha modalities (benchmarks) on agriculture and market-opening for industrial goods were decided.
China also adopted a position similar to that of India’s in its separate video conference with the US trade representative and WTO chief. The country remained firm in rejecting mandatory participation in sectoral tariff elimination talks, a senior Chinese official told Business Standard.
Though the Doha mandate clearly said that participation in sectoral talks was voluntary, the US had made it a condition that China, India and Brazil take part in talks on chemicals, industrial machinery, and electricals and electronics sectors on the ground that it was a must-have for its industrial lobbies.
Nath and Schwab also remained divided on the SSM for developing countries.
The SSM is meant to curb unforeseen surges in imports of farm products that undermine domestic farm products and adversely hit farmers. Already, such a mechanism is in place for industrialised countries in the form but the US and other farm exporters have insisted on a host of cumbersome conditions for availing the SSM.
The issue at the core of the divide between the two sides on Wednesday was whether a developing country could continue to impose SSM even after the prices are falling, and should there be a price cross-check mechanism.
The US maintained that India cannot impose the SSM if prices are falling after the imposition of SSM duties, a demand that was rejected by India.
Because of the maximalist positions adopted by the US, the Doha modalities talks have entered a phase of deep-freeze that can only come back to life after the Obama administration assumes office, several diplomats said.
