labels: economy - general, world trade organisation
WTO in the right direction though path yet to be pavednews
10 August 2004

WTO, Geneva meet agrees to a cut in export subsidies to agriculture and domestic support cap for the developed countries and leaves them unaltered for the developing

The direction of WTO agreements is right but the developing countries have to be cautious when the details and modalities of the framework are drawn out.

After the Doha round of the fourth ministerial conference in 2001 that bombed and left threads hanging, the Geneva meet on August 1, 2004 opened doors for a better balance between developed and developing countries in areas of agriculture. With the specifics yet to be slated and implemented, hopefully before the end of 2005, things would look green for developing countries.

What transpired at the Geneva meet:

  • Export subsidies for developed countries to be slashed and the domestic support cap to be reduced
  • Support subsidies extended by the developing countries to their resource-poor farmers will not be subject to any reductions
  • Identifying sensitive products which affect the livelihood of poor farmers
  • Special Safeguard Measures (SSM) for developing countries
  • Increased sensitivity to the concerns of developing countries like food security, livelihood and other rural developmental issues.
  • Three issues raised at the Singapore meet - investment, competition policy and transparency in government procurement - were dropped

Thus far, the developed nations (the US, the European Union (EU), Canada and Japan) have had more say in the formulation of these agreements which gave a natural tilt to suit their economies. In the Geneva round of talks held recently the G-20 nations have been able to finally put forth their issues and have been heard to the extent of achieving an agreement on the above mentioned, though the modus operandi is yet to be worked out.

Non-agricultural Market Access (NAMA) might still pose a problem as the framework has not secured the approval of all member countries.

Benefits accruable to India as a fall out of these negotiations will shrink owing to the high tariffs on agriculture and industrial products. The SSM will protect the interests of the poor farmers whose livelihood depends on it. It is yet to be seen how the benefits are translated and how much the forward and backward linkages eventually materialise. Kamal Nath, the union commerce minister has stated that he would prioritise the export promotion schemes to achieve higher growth and work towards making them WTO compatible.

All said and done, the Geneva round does indicate a positive stroke for the developing countries. Their collective action has achieved beneficial results and they have been able to voice their needs. They have to be alert now more than ever to ensure that the seeming benefits are not diluted by the design of the modalities.


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WTO in the right direction though path yet to be paved