US may cut farm subsidies, says Das

NEW DELHI, AUG 29:  Many believe that the current deadlock in WTO negotiations is difficult to break at least in this year.  But the former Indian ambassador to GATT, Bhagirath Lal Das holds a diametrically opposite view. He says the WTO negoiations are likely to resume in September and conclude in time to enable the US fast track authority to approve of the decision before June 2007.

According to Das, the US which had earlier agreed to reduce its total trade-distorting support (TDS) in agriculture to the level of $23 billion, may now agree to $19 billion level, close to the expectations of G-20. The EU too had offered to cut its average farm tariff by 51%. Against this, the developing countries may agree to a cut in industrial tariff on basis of the co-efficiency of 25 as against the co-efficient of 15 as demanded by the developed countries.

"There are hopes that if talks resume in September and these 3 issues are settled, a complete agreement on modalities in agriculture and NAMA can be reached by November end. Other substantive issues can be discussed concurrently till November and later taken up after the winter recess in mid-February 2007," said Das.

Ready for harvest
• WTO negotiations are likely to resume in September
• This will conclude in time to enable the US fast track authority to approve of the decision before June 2007
• US may now agree to $19 billion level, close to the expectations of G-20
 
Keeping in view the impending polls in the US and France, Das said "it is politically possible and feasable. US and EU have within their grip some significant concessions from the developing countries that they would not like to slip away."

He said France had earlier opposed a cut in average European farm tariff beyond 39%. But France was no longer an important factor in the EU. Now Germany has a greater say and the EU can possibly agree to an average farm tariff cut by 51%.

Das, however, cautioned that the proposed cut in domestic farm subsidy would not expand developing countries market access in the US and the EU.

The US would increase its decoupled income support, insurance against income loss and investment aid to farmers under Green Box.

The EU too would increase its investment aid. There may be concentration of TDS on a limited number of products and the total TDS aven at their reduced levels in the US and the EU can be highly injurious to developing countries.

Ref link: http://www.financialexpress.com/fe_full_story.php?content_id=138817