US, EU seek access in developing mkts

The US and EU are putting pressure on developing countries like India to provide greater market access to their farm produce in return for an elimination of export subsidies.

Developing countries are in turn seeking actual reductions in subsidies instead of mere statement of objectives.

Commerce and Industry Minister Kamal Nath is scheduled to hold separate bilateral meetings with US Trade Representative Robert Zoellick and Brazilian Minister for External Relations Celso Amorim. In addition, a meeting of the five key players "" the US, EU, Brazil, India and Australia "" is also scheduled along with the G-20 meeting.

Pressure has been increasing on developing countries ever since EU Trade Commissioner Pascal Lamy announced Brussels' intention to eliminate export subsidies last month.

While last week's negotiations at the World Trade Organisation meet in Geneva were largely aimed in this direction, the details will be discussed at the ministerial level on the sidelines of Unctad XI in Sao Paulo next week.

Trade negotiators, however, said India and the other members of the developing country alliance comprising Brazil, South Africa, Argentina and China (G-20) were averse to the blended tariff reduction formula being pushed by the US and the EU.

"The blended formula is not suitable for economies where there is a large population dependent on subsistence farming," said an official. Progress in agriculture negotiations hold the key to movement in talks in other spheres, including industrial tariffs and services trade liberalisation.

While WTO director general Supachai Panitchpakdi is pushing for the finalising of the framework for negotiations by the end of the next month, trade negotiators said developing countries are demanding actual reduction in domestic support instead of mere commitments.

Issues like the phase-out of export competition, which includes export credit, export guarantee, export investment, food aid and monopoly of state-owned enterprises need to be addressed along with phaseout of export sops, officials said.

The United States wants the export subsidies on export credit, guarantee, investment and food aid to be removed while the EU feels that since it is in favour of removal of export subsidy, all the programmes under export competition should be removed.