G-6 ministers to discuss US farm subsidies today

TRADE-OFF

The trade ministers of the G-6 countries will meet for a crucial round of talks here tomorrow to discuss the latest status of the Doha Round of negotiations. Among other issues, domestic subsidies given to the farm sector in the United States will be a key point of discussion.

"The G-6 meeting will provide inputs for the multilateral trade framework, which the Doha Round of talks aims to establish, keeping the development aspect of the developing and the least-developed countries in mind. In the WTO, things work in a bottoms-up way. Whatever is being discussed at the G-6 level will have to be adapted according to the needs of other WTO members," Commerce Minister Kamal Nath said at the sidelines of a function here.

The G-6 group comprises India, Brazil, United States, Japan, Australia and the European Union.

Several bilateral meetings were scheduled to take place before the G-6 meeting here today. European Union Trade Commissioner Peter Mandelson is believed to have met Nath and Brazilian Foreign Minister Celso Amorim. A bilateral meeting between United States Trade Representative Susan Schwab and Nath is expected tomorrow.

An official source said India, the EU and Brazil had a round of discussions today to assess the status of the Doha Round.

The round was suspended in July, 2006, as the WTO member countries could not agree on issues related to market access for industrial goods and agriculture subsidies.

While the United States was looking for a flexibility on increasing its trade distorting domestic subsidies in agriculture from $19 billion to $22 billion, it was also demanding greater market access for its industrial products. "The onus is on the United States to re-think its stance," said WTO expert Bishwajit Dhar.

In addition, the United States is planning to bypass the WTO norms by managing the farm subsidies through the proposed farm Bill. "While the US intends to cut subsidies by 0.2 per cent, it also plans to increase the WTO compliant support to its farm sector by 66 per cent. Essentially, it is trying to manage the subsidies," added Dhar.

The talks resumed in February this year, but there has not been any significant development so far. The reason for this deadlock is that none of the WTO member countries wants to be the first one to offer a package, relating to market access through tariff reduction as well as a commitment to reduce the subsidies (especially the United States).