No Compromise on Farmers and Infant Industries

I speak with sadness and a sense of loss. The developments in the G-6 meeting yesterday have highlighted what has been clear to many for quite some time – that there is little ground for convergence on the core issues in the Doha Round negotiations as of now.

The Doha Round was premised on the centrality of development and the elimination of the structural flaws in agricultural trade which is of crucial importance to developing countries. The distortions in agricultural trade arise mainly because of the huge subsidies being paid by developed countries to their farmers and due to the formidable non-tariff barriers to the market access aspirations of developing countries.

Developing countries cannot allow their subsistence farmers to lose their livelihood security and food security to provide market ac-cess to agricultural products from developed countries. That is the rationale for Special Products and Special Safeguard Mechanism for which the G-33 has been negotiating. The overwhelming majority of poor farmers in the world are represented in the G-20 and the G-33 which have been in the forefront in the struggle for equity in the agricultural trading system.

The G-20 and G-33 represent 90% of the world’s farmers. But we have to contend with the question of how between them, the US and EU account for over 50% of the world’s share in trade in agriculture with only 2% of their population in farming. The answer is simple. Huge subsidies en-able this trade at the cost of millions of developing country farmers.

The substantial reduction in trade distorting subsidies in developed countries and the protection of the livelihood interest of subsistence farmers in developing countries is the main component of the development dimension of this Round. Subsidised exports by developed countries not only pose a threat to food and liveli-hood security in developing countries, but also expose farmers of developing countries to unfair trade competition in their exports. Unfortunately, one member is unable to make any ef-fective reduction in trade distorting subsidies but, at the same time, is insisting that developing countries open up their markets to provide access to their subsidised products. Insistence by some developed countries to perpetuate the skewed agricultural trade do not provide the basis for a fair outcome.

Some developed countries are at-tempting to convert this Round into a Market Access Round for their products into developing country markets, thereby inverting the core development dimension. Developing countries are being asked to pay a price for the removal of structural distortions by developed countries.

India has always stood by other developing countries including LDCs to ensure the centrality of the develop-ment dimension in the negotiations and to strengthen the multilateral system. It is possible to negotiate trade issues but it is not possible to negotiate the subsistence and livelihood security of poor farmers in developing countries.
In NAMA developing countries are being asked to reduce their duties to levels which would threaten their infant industries. We cannot agree to reduction of duties on industrial goods without adequate safeguards.

This Round is not about the per-petuation of the structural flaws in global trade especially in agriculture. This Round is not about developing countries opening their markets for developed countries for their subsidised agricultural products. This Round is not about negotiating livelihood security and subsistence of hundreds of millions of farmers. This Round is not about preventing the emergence of industries in develop-ing countries.
This Round is about opening new markets for developing countries es-pecially in developed countries. This Round is about creating new oppor-tunities and economic growth for developing countries in all sectors including Industries and Services. This Round is about extracting LDCs and vulnerable economies from the stranglehold of poverty.

This is what we have failed to do so far in these negotiations. We can achieve a fair and sustainable outcome only when we recognise these central developmental issues, and look at trade through the prism of development.

India attaches utmost importance to the rules-based multilateral trading system of which the WTO is the core. This system has to be sustained by the commitment of all members. The current impasse in the negotiations poses a serious threat to the sys-tem. In the interest of the multilateral trading system, it is important that we continue to strive for ending this impasse.

Geneva, 24 July 2006.