PLIGHT OF FARMERS DIRECTLY LINKED
TO SUBSIDIES GIVEN BY DEVELOPED WORLD, SAYS JAITLEY
AGRICULTURE
FLAGGED AS INDIA’S KEY CONCERN IN WTO NEGOTIATIONS
STATEMENT
BY THE COMMERCE AND INDUSTRY MINISTER OF INDIA AT THE CANCUN INAUGURAL
PLENARY SESSION
The plight of farmers
in developing countries is directly linked to the level and kind
of subsidy given in the farming sector in the developed world,
Mr. Arun Jaitley, Minister of Commerce & Industry and Law
& Justice, Government of India said in a forceful statement
at the Opening Plenary of the 5th Ministerial Conference
of the World Trade Organisation (WTO) in Cancun (Mexico) today.
Clearly flagging agriculture as a key concern for India, Mr. Jaitley
made it plain that the commitment by the developed countries to
eliminate distortions in world agriculture caused by their policies
held the key to resolving differences among member countries in
this vital area. Stressing that the development dimension must
occupy centre stage of the negotiations, he called for the Ministerial
Conference to move towards a more inclusive and transparent decision
making process.
Pointing
out that the protection in the developed countries faced by developing
country exporters in agriculture is four to seven times higher
than in manufactures, Mr. Jaitley said that the effect was to
stimulate over production in high cost rich countries and to shut
out potentially more competitive products from developing countries.
"It is no surprise that over the past few years, agricultural
exports from developing countries to developed countries grew
at just half the rate they did to other developing countries…..
Let us also remind ourselves that the agriculture subsidies provided
by OECD countries are more than six times what they spend on official
development assistance for developing countries. OECD governments
support sugar producers at the rate of US $ 6.4 billion annually
– an amount nearly equal to all developing country exports. Subsidies
to cotton growers in a developed country totalled US $ 3.7 billion
last year, which is three times that country´s foreign aid to
Africa. The net effect of subsidising agriculture in developed
countries at the expense of products of the relatively poor in
developing countries is to aggravate global income inequalities.
On the other hand, against equity, justice and fair play, developing
countries are being asked to liberalise their agriculture. What
the farmers in developing countries demand is protection from
distortions in the trade of agricultural commodities, created
through the high level of subsidies in the developed countries.
The plight of these farmers is directly linked to the level and
kind of subsidies… in the developed world. Hence, it would be
difficult for us to agree to negotiations, which could potentially
place at high risk the very livelihood of 650 million people
in India, who are solely dependent on agriculture. It is
only when the developed countries agree to take five steps forward
in the removal of trade distorting subsidies that the developing
countries can take one step forward in the area of market access.
The legitimate concerns of billions of farmers in developing
countries, for whom agriculture means survival and not commercial
operation, cannot be sacrificed to sub-serve agri-business profits
of a few millions elsewhere sustained through $ 1 billion subsidies
each day in the OECD countries", Mr. Jaitley said.
Mr. Jaitley
underlined the urgent need to bring down the high tariffs and
non-tariff barriers on products of export interest to developing
countries in order to secure sufficient gains from globalisation
for them. Special & Differential (S&D) Treatment for
developing countries and policy space to deal with sensitive products
in agriculture taking into account their development needs, including
rural development and food security and livelihood concerns remained
an integral part of all elements of negotiations. "India
reiterates that under no circumstances can it accept any form
of harmonisation of tariffs in agriculture or obligations to create
and expand tariff rate quotas. India along with 19 other members
has put forward joint proposals on agriculture that we believe
offer a constructive and meaningful alternative. We look forward
to discussing it at the Conference", the Minister added.
On market access
negotiations for non-agricultural products (industrial
tariffs), Mr. Jaitley emphasised that suggestion for mandatory
harmonisation and elimination of tariffs would be most iniquitous
to developing countries. Further, he pointed out that being at
different stages of development, we did not have capacities to
understand binding obligations in all the seven sectors proposed
for tariff elimination.
Expressing deep
disappointment that the development dimension envisaged in the
Doha Work Programme had been given short shrift, Mr. Jaitley said
that the draft Cancun Ministerial Text was grossly inadequate
on implementation issues and would severely affect the interests
of developing countries in agriculture, industrial tariffs and
Singapore issues. "We cannot escape the conclusion that it
does not accommodate the legitimate aspirations of developing
countries and instead, seeks to project and advance the views
of certain developed countries…. If we not restore the priority
accorded to the outstanding implementation issues, the developing
countries would be forced to conclude that the ‘development’ elements
in the Doha Development Agenda is only rhetoric", he said.
He also referred to the unresolved issues relating to the special
& differential provisions for developing countries and stressed
the need to make all S&D provisions precise, operational and
effective as well as non-mandatory S&D provisions be converted
into mandatory ones within a specified time frame.
On Singapore
issues, Mr Jaitley said – "We do not believe that all
the Singapore issues are trade related…. Our strongest arguments
still remain that WTO is not the right forum, that the traditional
WTO principles of non-discrimination particularly national treatment
are not appropriate for a development policy related issue like
investment and that trade negotiators are not the right people
to deal with movements of capital that have dynamics of their
own". Pointing to the significant and deep differences in
the views of members on many elements of these issues, Mr. Jaitley
said – "Hence, we are not convinced of the appropriateness
of taking a decision on modalities (for negotiations) as it does
not give us any idea of the substance and direction of obligations
that agreements in this area may require us to undertake".
Underlining
India´s interests in the services negotiations, Mr. Jaitley
reiterated that liberalisation of certain sectors was essential
to accelerate growth in developing countries and emphasised
that for developing countries including India the balance of benefits
in the negotiations would accrue to the extent to which their
service providers were allowed to supply services in important
overseas markets either from remote locations or through temporary
movement of natural persons. "In case the resistance among
developed countries for agreeing to the request of developing
countries for enhanced market access under Modes 1 and 4 continues,
this would substantially erode our flexibility to make commitments
in sectors of interest to developed countries", Mr. Jaitley
said.
Mr. S.B. Mukherjee,
Minister of State for Commerce & Industry and Mr. Dipak Chatterjee,
Commerce Secretary, Government of India, among others of the Indian
delegation at the Opening Plenary Session.
Giving
India´s assessment of the multilateral trading system, the Minister
said that developing countries participated in the system in the
hope that it would lead to their economic betterment and not because
trade liberalisation was an end in itself. The system, he said,
has to meet this expectation and "the multilateral trading
system has to acknowledge that developing countries cannot afford
to travel at the same speed as developed countries to achieve
gains. Therefore, obligations to be undertaken by the developing
countries should not arise out of coercion. Rather, they should
have a feeling that these obligations are in their interest and
that they are in a position to accept and implement them".
Mr. Jaitley
also applauded the accession of both Nepal and Cambodia to the
WTO and said that India had very warm and friendly ties with these
two countries.
Earlier, India´s
position found an endorsement in the message of the UN Secretary
General Mr. Kofi Annan to the Ministerial Conference, which was
delivered by Mr. Rubens Ricupero, Secretary General, United Nations
Conference on Trade and Development (UNCTAD). In his message,
the UN Secretary General said – "Those who press poor countries
to open their markets may indeed have those countries´ best interests
at heart. But can we be surprised that poor countries are reluctant
to take them seriously, when they find the markets of rich countries
still closed to their products, and when they have to compete
at home, and in the world market, against subsidised products
from those same rich countries? These barriers and subsidies in
developed countries must be phased out, as fast as possible, for
the sake of humanity. To do so is in the interests of rich and
poor alike. Trade barriers and distortions can hurt a country´s
health whether it is developed or developing. Developed countries
spend vast sums on subsidies, often propping up relatively small
and unproductive portions of their economies. In the process,
they hurt their own citizens twice – as taxpayers and as consumers.
There are surely better ways to help those farmers in rich countries
who genuinely need help, than by subsidising big exporters so
that much poorer farmers in poor countries cannot feed their families.
It is not hard to imagine a system under which just about everyone
would be better off. Agriculture is a crucial issue. But it is
not the only area where the existing world trade order is imbalanced.
Opportunities for developing countries must also be opened by
effective liberalisation of trade in textiles, by specific agreements
that allow them to participate actively in the growing trade in
services and by faster transfer of technology. Of course, developing
countries also have a responsibility to help themselves. But trade
liberalisation is no panacea for developing countries. For many
of them, it involves considerable adjustment and social costs.
There is a need for synergy and proper sequencing – between the
capacities of the developing countries, the level of obligations
they are to take on, the cost of implementation and the adequacy
of financial and technical resources available to them. Developing
countries need aid for trade and such aid must not come at the
expense of aid for development.
