labels: Agriculture
Kamal Nath asks US to offer 'real' cuts in farm subsidy news
23 July 2008

Kamal NathMumbai: Commerce and industry minister Kamal Nath has asked the US to offer ''real'' cuts in trade distorting agricultural subsidies rather than making untenable proposals that, in fact, doubles subsidies from the current $7 billion to $15 billion.

The US proposal to reduce the subsidies was also not in line with the current food prices, Nath said.

The US had yesterday made an offer to reduce its overall trade distorting subsidies to $15 billion while its actual subsidies were in the range of $7 billion.

''It is hardly an offer when their applied duty subsidy is seven billion dollars," Nath said.

Kamal Nath who is back in Geneva to join crucial negotiations to break the Doha deadlock, said the developed countries are just looking at the pockets of developing countries and offering nothing in return.

The US wants large and emerging economies like India, China, Brazil and South Africa to open up the markets for manufacturing goods in return for an implicit cut - which in fact is an effective increase – in American farm subsidies.

''Tariffs are not distortions, subsidies are distortions. Tariffs protect trade and raise revenue," Nath said.

World trade talks entered a third day today after emerging economies such as Brazil and South Africa said the talks so far were ''useless without any real offer from the US over farm subsidy cuts.

''Fourteen years after the Uruguay Round of talks was concluded, you are still having subsidies in hundreds of billions of dollars. No actual reduction has taken place. So the unfinished business of the Uruguay Round of actually reducing trade distorting subsidies has to be done in this round," commerce secretary Gopal Pillai told the rich countries on Monday.

Getting developing countries to open up their markets for manufactured goods is difficult without an equal reciprocal offer from the rich countries to open up their services sector and cut agricultural subsidies.

Without a breakthrough on these core issues by the August, the Doha Round risks being put on hold for a couple of years more.


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Kamal Nath asks US to offer 'real' cuts in farm subsidy