Don’t treat India, China on a par with poor countries: US

Published On: 12, Dec 2017 | Source: Timesofindia

BUENOS AIRES: The US on Monday suggested that India, China and Brazil should not be treated on a par with poorer developing countries, prompting the government to immediately counter the offensive.

"We cannot sustain a situation in which new rules can only apply to the few, and that others will be given a pass in the name of self-proclaimed development status. There is something wrong, in our view, when five of the six richest countries in the world presently claim developing country status. Indeed, we should all be troubled that so many Members appear to believe that they would be better off with exemptions to the rules. If in the opinion of a vast majority of Members playing by current WTO rules makes it harder to achieve economic growth, then clearly serious reflection is needed," US Trade Representative Robert Lighthizer said in his intervention at the WTO meet here.

Developing countries such as India and Brazil enjoy special and differential treatment under various WTO agreements, allowing them to liberalize their policies over a longer period. Least developed countries have an even longer implementation schedule for reforms. Since China joined WTO several years after India and Brazil, it had to undertake higher commitments for opening up but it is still a notch below the developed world in many areas.

While the US has demanded higher commitment from India, Brazil and China in the past too, its recent anti-free trade rhetoric prompted commerce & industry minister Suresh Prabhu to make a last minute change in his speech at the plenary session.

"We are increasingly seeing that the discourse on development at the WTO is sought to be deflected by specious arguments based on aggregate GDP figures. While in India we are proud of our GDP and growth rates of recent years, propelled by innovative economic policies of my government, we cannot ignore that India is home to more than 600 million poor people," Prabhu said, in what was meant to underline the low per capita income in countries such as India despite the recent growth in the size of the economy.

"Therefore, we are legitimate demandeurs for special and differential treatment for developing countries. It is also noteworthy that many developed countries of today have benefitted from long periods of derogation from GATT rules in the area of agriculture and textiles," the minister added.

Even before the USTR statement, the minister had budgeted for a possible assault on the issue but did not expect a stance that, officials fear, may alter the course of discussions here. "India calls upon the WTO membership to re-endorse the centrality of development in WTO negotiations without creating new sub-categories of countries," Prabhu said as he sought a solution to address potential problems in food procurement in the future. "This is a matter of survival for 800 million hungry and undernourished people in the world. A successful resolution of this issue would fulfill our collective commitment to the global community. In this context, we cannot envisage any negotiated outcome at MC 11 (WTO's 11th ministerial conference), which does not include apermanent solution."

India is, however, insisting that the final agreement should be better than the one agreed three years ago as it puts a lot of conditions on using the minimum support price policy. But there is resistance from the rich countries that want to maintain procurement at 10% of the value of production.

The other crucial issue for India is domestic subsidies offered to farmers in the US and Europe. "The Agreement on agriculture provides considerable flexibility to the developed members to provide huge subsidies and further, to concentrate these subsidies on a few products. This asymmetry needs to be addressed as a first step in agricultural reform through a post-MC11work programme without, however, shifting the burden of reduction of agricultural subsidies to developing countries," Prabhu said. He also indicated support for talks on an international services framework only if India's concerns related to visa and qualification rules for its doctors, nurses and software professionals were factored in. At the same time, Prabhu sought to block negotiations on the so-called new issues and termed some of them as nontrade issues.

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