Kamal Nath supports new WTO compromise proposals

20 Jul 2007


Mumbai: The new compromise proposals prepared by mediators of the World Trade Organisation (WTO) provided a good basis for starting intensive negotiations on a global trade pact, commerce and industry minister Kamal Nath said.

"This is a text which is not a text of convergence, but this is a text which leads to intensive negotiations," Nath told reporters on the sidelines of a conference.

Any US cut in farm subsidies would be enough to push India to make concessions in World Trade Organisation talks, Kamal Nath said.

In India''s first reaction to proposals for a compromise presented by the chairmen of the WTO negotiations on July 17, Nath said he is prepared to use the blueprints as the basis "to resume intensive negotiations."

"I would be happy with any reduction the US is willing to do on their applied levels" of agricultural subsidy spending," he said.

The US has offered to lower the ceiling it''s allowed to spend under WTO commitments to $17 billion a year. This week''s proposal from the trade arbiter calls for a reduction to between $13 billion and $16.4 billion.

"The US says it wants to retain the right to increase these subsidies," Nath said. "A development round doesn''t mean you reserve the right to keep your subsidies and increase your distortion. We want the distortions removed."

The compromise proposal drafted by the WTO were meant to revive troubled farming and industrial goods talks and save the Doha free trade accord.

Doha was launched shortly after attacks on the United States in 2001 in a bid to shore up confidence in the world economy, but it has been mired in problems and risks being put on hold for several years if a deal is not reached soon.

Developing countries like India and Brazil are seeking both to bring down rich nations'' barriers to their farm exports, and a scaling back of what they call trade-distorting subsidies to farmers in Europe and the United States.

But they are concerned about opening their markets up too much to imports of industrial goods from developed nations.

Negotiators are due to convene in Geneva next week and then recess until September.

Nath said India hoped that when talks resumed in September, developing countries'' concerns about ensuring the development mandate of the round would be addressed.

"Of course we have concerns on industrial tariffs but at least now there are certain parameters, so we hope to move on this," he said.

Nath said he spoke with WTO Director General Pascal Lamy on the telephone for about an hour on Friday to discuss the text.

Unless the WTO''s 150 governments accept this week''s proposals as the basis for compromise, the six-year-old talks that is expected to add at least $96 billion a year to the global economy will come to an end.

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