No WTO deal better than a bad deal, says Indian Minister

Original Publication Date: 
4 May, 2006
South North Development Monitor

India's Commerce and Industry Minister Kamal Nath stressed on 25 April in Geneva that the current WTO talks must not violate cardinal development principles.

"Anything that violates the cardinal principles and mandate, then there is nothing to negotiate," he stressed. "No deal is better than a bad deal." Speaking to the media at the WTO on a stopover from a trip to Germany, Nath said that there is still not adequate recognition that the current WTO talks are a "Development Round", and this has been demonstrated by negotiations still continuing on certain cardinal principles that are not up for negotiations.

He said that one cannot have a global trade deal that is against the cardinal principles and mandate of the Doha Round, which is "no negotiations on subsistence, no negotiations on de-stabilization and de-industrialization, which goes against the very concept of a Development Round."

"I have always said that 'no deal is better than a bad deal'," Nath said. If anything violates the cardinal principles and mandate, then there is nothing to negotiate, he stressed.

While deadlines are important, they cannot be at the cost of these cardinal principles and the very fundamentals of the mandate of this round, Nath added.

The developing countries went into this round being assured that this is a development round, and on a commitment by developed countries that rules and distortions slanted against developing countries will be rectified, Nath said, adding: "That must remain the very basis of this round." When talking about the cardinal principles and the mandate of the Doha Round, Nath made references to subsistence farming, and de-stabilization and de-industrialization in developing countries. "Certainly, we cannot see de-stabilization or de-industrialization of industry in developing countries. If that is sought, well forget it," Nath said.

He also stressed that there can be no compromises with subsistence farming. "If, in India's case, 650 million subsistence farmers are sought to be put on a suicide track, well forget it."

He added that if 300 million people who live on less than $1 a day are being pushed to 50 cents a day, "well, we should forget it again."

"We need to respect the mandate and respect certain cardinal principles, that issues of subsistence and development are not up for negotiations." Nath pointed out that the developed economies built up their industrial base with 50-60 years of protectionism, and now when some developing countries are on the threshold of consolidating industry, this cannot be undone. The survival and growth of infant industry in developing countries is not up for negotiation, Nath stressed.

Referring to comments made by EU Trade Commissioner Peter Mandelson in the media recently on seeking market access in India, Nath said that the fact of the matter is that trade has gone up in India, with imports going up by 30-35% every year. Nath added that he did not see what more market access is being sought.

He also said that he found it surprising that this issue is being linked with the removal of subsidies and support in developed countries. It's like saying: "Please pay us for not doing what we shouldn't be doing in any case."

In agriculture, Nath noted that the only defensive mechanism against subsidies of the developed countries is tariffs. "We cannot give up this defensive mechanism. We cannot have subsidy-loaded trade," Nath said. Nath also met with WTO Director-General Pascal Lamy and informed him that India will continue to be as supportive as it can for a successful conclusion of the Doha Round.

A notable feature of the press briefing was Kamal Nath's insistence that the NAMA negotiations should reflect the issue of percentage reductions of tariffs that WTO members are willing to make.

Much of the NAMA negotiations have been on formulae and coefficients. At one point, Nath implied that these should not be used in the negotiations as a camouflage to hide the key issue of percentage reductions to be undertaken. Where industrial goods are concerned, Nath said, let the US and the EU meet the tariff reductions undertaken by India in the last ten years, and define what percentage tariff reductions they want and what they are willing to do. If this is done, then he assured that India would do slightly less than that.

He said that he had been asking Mandelson and US Trade Representative Rob Portman this question for the last three months, as to how much percentage reductions they are willing to do in NAMA, but he has yet to get an answer. He elaborated that with respect to tariffs on industrial goods, India had reduced its tariffs by 50% (at bound rates) since the Uruguay Round. Nath said that he wants the developed countries to also do the same as a starting point and then tell him by what percentage they will reduce in the Doha Round, and that India is willing to reduce slightly less than that. For example, if developed countries reduce by 50%, then India could reduce by 40%, Nath added.

'How much are you willing to do in the Doha Round', has to be the basic thing from which to derive the formula in NAMA, Nath indicated, saying that the formula is only the mechanism to translate intent into figures. The formula and coefficients cannot become a camouflage for percentage reduction commitments.