India rejects US plan on farm tariffs

India, Indonesia, China, Venezuela, Turkey and the Philippines have rejected a proposal by the United States and other farm exporting countries that aims to severely curtail the flexibility to designate certain farm tariff lines as special products in the Doha market access negotiations for farm products.

The United States and a group of farm exporting countries "" Australia, Uruguay, Thailand, Paraguay, New Zealand "" circulated a one-page proposal today suggesting how the special product flexibility should be availed subject to certain conditionalities.

The US demanded a severe downsizing of the total number of tariff lines that would be designated as special products to 8 per cent as against the benchmark of 12 per cent to 20 per cent set by the chair for Doha agriculture negotiations Ambassador Crawford Falconer

The US and its partners insisted that 4 per cent tariff lines in tier-I be subjected to a 25 per cent cut and the remaining 4 per cent to a 15 per cent cut. Besides, it insisted that only 1 per cent tariff lines in the second tier be allowed for zero cut. The proposal also listed conditions for availing the special product flexibility.

The US proposal flies in the face of what the chair had proposed in the revised modalities.

The chair suggested that out of the total limit between 12 per cent and 20 per cent tariff lines to be designated as special products, developing countries can designate 6 per cent of tariff lines for a tariff cut of between 8 per cent and 15 per cent.

Another 6 per cent of special product tariff lines were proposed for a cut of between 12 per cent and 25 per cent. The remaining eight were to face zero cut.

All these figures in the revised draft modalities are subject to further negotiations.

Indonesia, which is the main coordinator of the G-33 coalition, which includes India, China, Kenya and Venezuela, slammed the US proposal.

Indonesian Ambassador Bustami Gusmardi said the US' proposal was not "constructive" and that his coalition was ready to work on the basis of the numbers proposed by the chairman in the revised draft modalities.

An Indian trade official warned that if the US and other members were bent upon undermining the flexibility for special products, New Delhi would be forced to reconsider its positions in every area of Doha trade negotiations.

The official described the US' proposal as puzzling, arguing that Washington was prepared to work on the numbers suggested by the chair to cut its overall trade-distorting domestic subsidies but was not prepared to work on the figures Ambassador Falconer suggested on special products.

Brazil supported the Indian position while Australia, Uruguay and Thailand backed the US' proposal.

Though many members want the US to bring down its domestic farm subsidies to its current applied level of around $11 billion, the US has all along maintained that it will not accept such a demand.