Threat challange for Indian Agriculture?

Note-Please read this article(Courtsey- ICTSD) because if this happens as per study and its findings a chaotic situation will emmerge for Indian Agriculture. V Acharya

A global trade deal at the WTO would lead to significant cuts in China’s already-low agricultural tariffs, new ICTSD research shows.

As governments renew efforts to clinch a deal in the ongoing Doha Round of trade talks, the study shows that the draft accord would cut China’s maximum permitted ‘bound’ farm tariffs by around one sixth - despite current rates already being one quarter of the average world tariff level. Because China’s actual applied tariff levels are close to these bound levels, most cuts would translate directly into new market access for exporters.

”China is one of the least protected markets for agricultural products in the developing world,” notes the author of the study, Professor Tian Zhihong of the China Agricultural University.

The study shows that tariff rates would be brought down to 13 percent from an initial average of 15 percent, after accounting for gentler tariff cuts for products deemed to be ’sensitive’ and for those considered important for food security and livelihoods. With 900 million people working in agriculture, and a growing income gap between cities and the countryside, China has emphasised the need to shield key products from cuts.

”China has set the pace in promoting the liberalisation of trade among WTO Members,” argues Tian. “There is therefore relatively little room left for further substantive concessions on special products that are important for food security, farmers’ livelihoods and rural development.”

China will also benefit from clauses permitting countries that have recently joined the WTO to cut tariffs by less - a key Chinese demand after gruelling accession negotiations slashed tariffs on 95 percent of the country’s products to below 30 percent.

As urban incomes in China are over three times higher on average than those in rural areas, the government has recently shifted from taxing agriculture to supporting it. The new draft text could constrain planned spending on cotton, and, if prices are high, on wheat. However, many other payments are likely to be exempt from cuts on the basis that they cause no more than minimal trade distortion.

”WTO regulations will be important factors affecting China’s agricultural policy-making,” the author notes.

The draft text could also reduce barriers to China’s exports - primarily to developed countries, where average tariffs facing Chinese exports would be cut by about one third, from 16 percent to 11 percent. Continued EU and Japanese protection for rice - one of China’s main exports - would probably mean little market access expansion for this product, although tariffs on other key exports such as vegetables could be cut by around one third.

The US has insisted that large developing countries such as China offer more market access for their exports before a draft WTO accord can be signed. Developing countries have argued that this would affect their food security and the livelihoods of small farmers, especially while developed countries maintain extensive trade-distorting subsidies for their domestic producers.

Is Doha Conclusion possible in 2010?

Heads of state from 13 major world economies vowed last week “to seek an ambitious and balanced conclusion to the Doha Development Round in 2010,” just as trade officials at WTO headquarters in Geneva prepared to ramp up their negotiations before the organisation’s annual summer break.

But such high-level promises have been made before. The recent statement from the G8+G5 countries has been preceded by dozens of political vows for a quick end to the global trade talks, which were launched in 2001 to help developing countries prosper through trade. But after nearly eight years of slow progress and missed deadlines in the negotiations, the ongoing economic slump has made a world trade deal - a deal that the WTO’s director-general says would save the global economy more than US$ 130 billion each year - appear more pressing than ever.

The call for a push to conclude the talks emerged from a summit of the G8 countries - Canada, France, Germany, Italy, Japan, Russia, the United Kingdom and the United States - that was held in L’Aquila, Italy last week. The G8 were joined by the G5 major emerging economies - Brazil, China, India, Mexico and South Africa - for talks on the second day of the three-day summit. The declaration was signed by both groups.

But the Doha talks will not have to start from scratch. The leaders said that the negotiations should build “on the progress already made, including with regard to modalities” - the WTO’s term for the framework deals on tariff and subsidy cuts - that officials have been negotiating over the past several years. But the statement also stressed the need to enhance “the transparency and understanding of the negotiating results to date,” a nod to recent calls from Washington, which has insisted that its exporters need greater clarity on how they might be affected by a deal.

The heads of state also called on their trade ministers “to explore immediately all possible avenues for direct engagement within the WTO” and to meet in advance of the next G20 summit, which will be held in the industrial city of Pittsburgh in the US in September. India has already begun preparations to host such a meeting; the gathering is set to take place in New Delhi on 3 and 4 September (see Bridges Weekly, 8 July

Cortsey-Bridges, By Vidyanand Acharya

G 8 to wrap Doha Round?

Leaders from the G8 group of major world economies will commit to wrapping up the WTO’s Doha Round of trade talks as soon as possible, according to a draft communiqué that was seen by Reuters. Absent from that statement, however, is a timeline for the completion of the talks, a point that is being strongly pushed by the G5 group of major developing economies.

But a second draft statement that has been prepared for the G8 plus the G5 does include such a timeframe - it calls for the global trade talks to be concluded before the end of next year.

”Leaders commit to reaching an ambitious and balanced conclusion to the Doha round in 2010, consistent with its mandate, building on progress already made on modalities,” a draft of the G8+G5 statement said, Reuters reported.

The discrepancies between the two drafts are expected to be ironed out in joint talks between the two groups on Thursday.

An announcement on Doha is expected to be made official before the end of the three-day G8 summit that kicked off in L’Aquila, Italy on Wednesday. The G8 countries consist of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

The G5 countries - emerging economies Brazil, China, Egypt, India, Mexico and South Africa - were slated to hold parallel talks on Wednesday and will join the G8 leaders for meetings on Thursday.

WTO Director-General Pascal Lamy, who is attending the summit, shied away from assessing the prospects for concluding a global trade deal, which he has long championed as a means to bolster the global economy and forestall a substantial increase in protectionist measures amid the ongoing slump.

”I probably will be able to give you a clearer answer to this question on Friday after the G8 and the G8-plus-5 discussions on trade,” Lamy said on Tuesday, Reuters reported.

Further progress toward a Doha deal could come in early September, when India is planning to host a two-day conference of trade ministers in New Delhi. The ‘mini-ministerial’ will bring together top trade envoys from a select group of 25 to 30 countries, according to a trade official with knowledge of the meeting. While the meeting’s agenda has yet to be finalised, the focus of the gathering will be the Doha Round of trade talks, which have struggled along in fits and starts for nearly eight years without reaching a conclusion. The meeting in New Delhi, set for 3 and 4 September, is intended to build momentum on Doha ahead of a summit of the G20 heads of state to be hosted by the US later that month.

Also on the agenda at this week’s summit in L’Aquila is a proposal to help the world’s hungry.

”We hope to approve an initiative for food security in the world. We will approve about $10-15 billion for all the people in the world who are suffering from hunger,” Italian premier Silvio Berlusconi told journalists on Tuesday, Reuters reported.

Washington is prepared to pledge US$3-4 billion for the plan, and has called on other countries to match that commitment, according to a draft declaration that was seen by Reuters.

NGOs have called on the leaders to prioritise agriculture and food policies that improve the position of small producers and women in their declaration on the matter.

ICTSD reporting; “G8 plus G5 agree to conclude Doha in 2010 - draft,” REUTERS, 8 July 2009; “Berlusconi hopes G-8 to pledge $10-15 billion for food security,” 7 July 2009.

Leaders from the G8 group of major world economies will commit to wrapping up the WTO’s Doha Round of trade talks as soon as possible, according to a draft communiqué that was seen by Reuters. A second draft statement prepared for the G8 plus the G5 group of major developing economies calls for the global trade talks to be concluded before the end of next year.

”Leaders commit to reaching an ambitious and balanced conclusion to the Doha round in 2010, consistent with its mandate, building on progress already made on modalities,” a draft of the G8+G5 statement said, Reuters reported.

The announcements are expected to be made official before the end of the three-day G8 summit that kicked off in L’Aquila, Italy on Wednesday. The G8 countries consist of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.

The G5 countries - emerging economies Brazil, China, Egypt, India, Mexico and South Africa - were slated to hold parallel talks on Wednesday and will join the G8 leaders for meetings on Thursday.

WTO Director-General Pascal Lamy, who is attending the summit, shied away from assessing the prospects for concluding a global trade deal, which he has long championed as a means to bolster the global economy and forestall a substantial increase in protectionist measures amid the ongoing slump.

”I probably will be able to give you a clearer answer to this question on Friday after the G8 and the G8-plus-5 discussions on trade,” Lamy said on Tuesday, Reuters reported.

Further progress toward a Doha deal could come in early September, when India is planning to host a two-day conference of trade ministers in New Delhi. The ‘mini-ministerial’ will bring together top trade envoys from a select group of 25 to 30 countries, according to a trade official with knowledge of the meeting. While the meeting’s agenda has yet to be finalised, the focus of the gathering will be the Doha Round of trade talks, which have struggled along in fits and starts for nearly eight years without reaching a conclusion. The meeting in New Delhi, set for 3 and 4 September, is intended to build momentum on Doha ahead of a summit of the G20 heads of state to be hosted by the US later that month.

Also on the agenda at this week’s summit in L’Aquila is a proposal to help the world’s hungry.

”We hope to approve an initiative for food security in the world. We will approve about $10-15 billion for all the people in the world who are suffering from hunger,” Italian premier Silvio Berlusconi told journalists on Tuesday, Reuters reported.

Washington is prepared to pledge US$3-4 billion for the plan, and has called on other countries to match that commitment, according to a draft declaration that was seen by Reuters.

NGOs have called on the leaders to prioritise agriculture and food policies that improve the position of small producers and women in their declaration on the matter.

Courtsey- ICTSD