WTO Geneva: Collapse of mini-ministerial talks again exposes developed countries' insincerity Print E-mail
New Delhi -- Monday, July 03, 2006

Third World scores for now in Geneva


The collapse of the WTO mini-ministerial talks in Geneva has once again exposed the developed countries’ insincerity towards the implementation of the Doha Development Agenda.

A group of six influential countries including the US, the European Union, Japan, Australia, Brazil and India could not break the deadlock. The developed countries, particularly the US, were reluctant to commit sharp reduction in “trade-distorting” farm subsidies. Commerce minister Kamal Nath put up well in defence of the small and subsistence farmers of the developing and least-developed countries, saying talks cannot proceed unless there is a categorical commitment for reduction in farm subsidies by rich countries. Such subsidies have depressed global prices, thereby denying remunerative prices to farmers in the Third World, and placing their livelihood at stake.

The credit for taking such a tough stand should not go to Nath alone. Trade ministers from the African and Caribbean group of countries, and the G-33 in particular, should be complimented for creating a conducive environment for unity amongst the Third World nations on this issue. The G-20 including India and Brazil were also unanimous in their views.

Yet, Nath deserves to be complimented for not deviating from his position, despite pressures from the agriculture ministry, which has launched its programme for unilateral liberalisation of imports of agro commodities, beginning with wheat and sugar. A confidential note was reported to have been sent by the agriculture ministry on the eve of the mini-ministerial, suggesting not to press hard for a reduction in rich countries farm subsidies, as India may need to depend partly upon cheap subsidised imports in the near future to meet the needs of its growing population.

There is, however, a growing dissension in the ruling UPA coalition over the unilateral import liberalisation policies being pursued by the the dual ministries of agriculture and food, headed by Sharad Pawar. The decision to import 3.5 million tonne (mt) wheat, by drastically reducing the tariff to zero, and relaxing the quality norms was taken by Pawar in consultation with Prime Minister Manmohan Singh. It was just two weeks back the Cabinet gave its restrospective approval to wheat imports, deals for which have already been signed. Cabinet also approved Pawar’s plan to give unilateral market access in sugar under a tariff rate quota (TRQ) for imports against zero duty. It also approved traders to import wheat against a relaxed duty of 5%.

To justify his new import policy, Pawar has taken the pretext of rising prices. There is no shortfall in production of any agro commodity, this year. The rise in prices is primarily due to large-scale hoarding by traders, corporate houses and MNCs. The government is unable launch a massive de-hoarding drive, as the law regulating hoarding has been repealed. The wheat import is being done at the behest of US Department of Agriculture, which said India needs to import 4.5 mt wheat.
The president of the Congress party and the chairperson of the UPA, Sonia Gandhi is perturbed at the mishandling of the price situation by the government. She has put on hold the government’s eagerness to sign free trade agreements (FTAs)with other countries, which may endanger the interests of farmers. In the context of the mini-ministerial in Geneva, Sonia Gandhi had rightly advised Nath not to compromise the interests of farmers.

With the UPA chairperson now being active, there are hopes that the government would soon rectify its policies which have gone against the farmers and benefitted the corporates and MNCs.

WTO negotiations had suffered failures at Seattle and Cancun. The Hong Kong ministerial was also a failure, though not officially declared, as the trade negotiators offered to keep the negotiations alive. Subsequent days have proved that it is difficult to break the deadlock. The WTO is now alive through a mechanism of ‘artificial respiration’. In such a situation, there are chances for the developing countries to force unilateral opening up of Third World markets, either through FTAs or through pressures on national governments, as has been the case of India in context of wheat and sugar. The Third World should, therefore, be careful on this account.