NEW DELHI: This might come as a shocker. The US’ trade distorting farm subsidy more than doubled a decade after it committed to bring them down by 20% in the Uruguay Round agreement of the World Trade Organisation in 1995. The overall trade distorting subsidies (OTDS), which were about $10 billion in 1995, increased to $22.6 billion in 2005 and then fell slightly to $17.4 billion the following year.
India and other developing countries could not do anything about it as the US had all its numbers in order. The country managed to actually increase its subsidies instead of cutting it down as it had sneaked into a foot note of its schedule of commitments for the Uruguay Round, an asterixed point changing the base year of calculation from 1995 to 1986-88. Since in 1986-88, its trade distorting subsidies was at an all-time high of $58 billion, a 20% reduction would mean that it was mandated to reduce its subsidies to just $46 billion.
India, according to officials, is unwilling to be taken for a ride the second time round. Once negotiations of the ongoing Doha round nears completion, the commerce department is planning to recruit and train at least 80 economics graduates to go through the schedules of implementation submitted by individual members based on commitments made during negotiations. The idea is to identify and weed out the different clauses which members might introduce to nullify liberalisation commitments made.
“We have to be extremely careful this time. We want to ensure that the promises we are able to extract out of our developed country partners are fully implemented,” an official said.
India and other developing countries have already raised their vigil against similar moves by the US during the current Doha round. While all members have agreed to accept the base year average of 1995-2000 for further reduction of OTDS, the US is insisting on a base year period of 1995-2004.
Officials said that since US’ OTDS is higher in the 2000-2004 period, increasing the base year average by four years would lower its reduction commitments by around $4 billion. “The G-20, the developing country grouping on agriculture, has strongly objected to the US move,” the official added.
The group of young scholars to be appointed by the government to cross-check claims will be given proper training to go through the voluminous schedules submitted by members, especially the developed countries. Wherever, a discrepancy is identified, the Indian government will approach the member concerned and the WTO secretariat to remove them. “We will sign the final WTO agreement only when we are satisfied that there is no slip between the cup and the lip,” the source said.
Officials pointed out that since the schedules run into thousands of pages, developing countries failed to read the fineprint during the Uruguay Round as they did not have enough officials to go through the text. The appointment of trainees for six months will hopefully take care of the manpower crunch.
Although it seems that it would take a while before the round, which involves not just agriculture, but also industrial goods, services and rules, among other issues being negotiated, India is putting its house in order as it does not want to be caught napping again.
India and other developing countries could not do anything about it as the US had all its numbers in order. The country managed to actually increase its subsidies instead of cutting it down as it had sneaked into a foot note of its schedule of commitments for the Uruguay Round, an asterixed point changing the base year of calculation from 1995 to 1986-88. Since in 1986-88, its trade distorting subsidies was at an all-time high of $58 billion, a 20% reduction would mean that it was mandated to reduce its subsidies to just $46 billion.
India, according to officials, is unwilling to be taken for a ride the second time round. Once negotiations of the ongoing Doha round nears completion, the commerce department is planning to recruit and train at least 80 economics graduates to go through the schedules of implementation submitted by individual members based on commitments made during negotiations. The idea is to identify and weed out the different clauses which members might introduce to nullify liberalisation commitments made.
“We have to be extremely careful this time. We want to ensure that the promises we are able to extract out of our developed country partners are fully implemented,” an official said.
India and other developing countries have already raised their vigil against similar moves by the US during the current Doha round. While all members have agreed to accept the base year average of 1995-2000 for further reduction of OTDS, the US is insisting on a base year period of 1995-2004.
Officials said that since US’ OTDS is higher in the 2000-2004 period, increasing the base year average by four years would lower its reduction commitments by around $4 billion. “The G-20, the developing country grouping on agriculture, has strongly objected to the US move,” the official added.
The group of young scholars to be appointed by the government to cross-check claims will be given proper training to go through the voluminous schedules submitted by members, especially the developed countries. Wherever, a discrepancy is identified, the Indian government will approach the member concerned and the WTO secretariat to remove them. “We will sign the final WTO agreement only when we are satisfied that there is no slip between the cup and the lip,” the source said.
Officials pointed out that since the schedules run into thousands of pages, developing countries failed to read the fineprint during the Uruguay Round as they did not have enough officials to go through the text. The appointment of trainees for six months will hopefully take care of the manpower crunch.
Although it seems that it would take a while before the round, which involves not just agriculture, but also industrial goods, services and rules, among other issues being negotiated, India is putting its house in order as it does not want to be caught napping again.
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