The Hindu : Jaitley to attend G-21 meeting

Online edition of India's National Newspaper
Sunday, Dec 07, 2003

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National

Jaitley to attend G-21 meeting

By Sushma Ramachandran

New Delhi Dec. 6. In a precursor to the much-awaited resumption of trade negotiations at the World Trade Organisation, the Commerce and Industry Minister, Arun Jaitley, is expected to attend a meeting of the Group of 21 in Brazil on December 12.

Official sources say the meeting is likely to set the tone and tenor of discussions at the WTO General Council on December 15 in Geneva, when trade talks are expected to commence from where they were left off at the failed Cancun ministerial conference.

Mr. Jaitley will be leading an official delegation including the Commerce Secretary, Dipak Chatterjee, to the meeting of the newly-formed "third force" which played a crucial role at the Cancun conference. The Group of 21 includes India, Brazil and China apart from a host of other countries which had united on the critical issue of agriculture just a month before the conference began.

The group had taken the stance that the agreement reached by the United States and the European Union on the issue of agricultural subsidy was not acceptable as a basis for talks on an agreement on agriculture. It was pointed out that the huge food subsidies enjoyed by farmers in the U.S. and Europe were distorting the terms of trade for the developing countries.

In the case of India, Mr. Jaitley had pointed out during the discussions that the concerns of over 600 million farmers in the country had to be taken into account.

Similarly, other developing countries observed that distortions due to the huge food subsidies in the developed countries had led to a steep fall in the prices of agricultural products, leading to severe hardships for farmers. The E.U. and the U.S. were thus forced to defend their positions but it is not clear whether the pace of cutting back on these large subsidies will actually pick up.

Mr. Jaitley had told Parliament earlier this week that correction of distortions as a result of the policies of the developed countries was a major demand at the Cancun conference. The effect of removing such distortions had a lag effect and therefore developing countries required calibrated changes to market access. He pointed out that developing countries also required a special safeguard mechanism to deal with the ill effects of surge in imports as well as designation of certain products as Special Products, which would mean lower reduction in tariff.

As for the response of developed countries to these demands, sources here say that though the E.U. had conceded that it would have to change its strategy, it may not ultimately agree to further subsidy cuts. The visiting President of the European Commission, Romano Prodi, had said the system of subsidy needed to change and the process had already begun. But he did not offer any hope that it would take place in the short run.

In any case, the G-21 meeting in Brasilia will be followed by the WTO General Council meeting in Geneva where this issue will be taken up along with others like the "Singapore" issues considered important by the E.U. The E.U. had offered to drop its insistence on these issues at Cancun as another coalition of developing countries led by Malaysia had opposed all of them. It is possible, however, that two of these issues may be revived at Geneva.

The four Singapore issues are on the linkage of trade with areas like investment, competition, trade facilitation and government procurement.

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