Kamal Nath talks tough at WTO ministerial

Deadlock imminent despite US aid offer.

The sixth ministerial meeting of the World Trade Organisation today appeared headed for a deadlock with members taking tough positions at the plenary session.

While India and Brazil stressed the need for developed countries to make concessions to create a level playing field, the EU said the success of the Doha Round depended on movements in industrial tariffs and services. The US proposed a "global formula" to break the deadlock in agriculture.

In a strongly worded statement, Commerce and Industry Minister Kamal Nath said, "Trade commitments undertaken by the developed countries, which throw people living on subsistence into a chasm of poverty and unemployment, cannot be supported."

He warned that the negotiations would be deemed "a failure" unless they ensured free and fair trade. Nath said the proposed structure in agriculture was the most distorted of all and unless the playing field was completely levelled, farmers in developing countries would not be able to compete globally.

Referring to industrial tariffs, he said developed countries needed to eliminate tariff peaks and tariff escalation if they wanted to access markets in developing countries.

Taking up the cause of the least developed countries (LDCs), Nath said the ministerial meeting should address the burning issues of cotton and preference erosion, and finalise a proposal for duty- and quota-free LDC exports to the developed countries without hedging.

He said the ministerial should pave the way for the launch of negotiations on issues pertaining to the relationship between the Trade Related Intellectual Property Rights Agreement and the convention on bio-diversity. In his address, EU Trade Commissioner Peter Mandelson rebuffed the demand by developing countries for a movement first on agriculture.

"A single-issue round cannot succeed. We need more to negotiate about. That is why the success of the round will depend on our ambition to liberalise trade in industrial goods and services and to strengthen trade rules," he said.

This, he added, could provide more opportunities for developing countries than agriculture would. Mandelson said all developed countries and the advanced developing countries should commit to providing duty- and quota-free access to all products from all Least Developed Countries.

In addition, the LDCs should be exempted from liberalisation, if they wish, while for developing countries, there should be a recognition that obligations should be proportionate to their capacities.

United States Trade Representative Rob Portman said the only way to break the current deadlock in agriculture was to have a convergence on reducing tariffs by agreeing to a "global formula" which met the Doha requirement of substantial improvement in market access.

Portman also offered that if forward movement on market access was not achieved, then member countries could agree on an end-date for elimination of all forms of export subsidies as an alternative. He announced that the US would double its contribution for the Aid for Trade Programme from $1.3 billion in 2005 to $2.7 billion annually by 2010.

Portman, however, made the additional money conditional to market access expansion and elimination of trade-distorting subsidies. Brazil's Foreign Affairs Minister Celso Amorim said major economies should not expect concessions from developing countries other than what they were willing to offer.

"This would tantamount to special and differential in the reverse. It just won't happen," Amorim said.