Press Statement

 The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:

On the Upcoming WTO Mini-Ministerial Meeting

 The Union Commerce Minister is going to participate in a mini-Ministerial meeting at Geneva from 21-25 July 2008, convened by the WTO Director General. This mini-Ministerial is being held in order to push ahead with the Doha Round negotiations, which have remained inconclusive, even after seven years. Two texts on Agriculture and Non-Agricultural Market Access (NAMA) issued on 19th May 2008 will form the basis of the negotiations. These texts reflect the efforts of the advanced countries led by the US to tilt the outcome of the Doha Round, which was supposed to be a “development” round, decisively against the interest of the developing countries.

The revised text on Agriculture requires the developing countries including India to reduce tariffs on agricultural products by 36%, which if agreed upon would harm the interests of the small and marginal farmers. In India, out of the 715 tariff lines in agriculture, only 8% of tariff lines will be eligible to be treated as Special Products, out of which only 3.2% of the tariff lines will be subject to no tariff cuts and 4.8% of tariff lines will be subject to an average cut of 15%. Considering the multiplicity of India’s agricultural product range and the crucial importance of these products for the livelihood of a vast majority of Indians, the range of protection available under Special Products is too narrow and too weak. The Special Safeguard Mechanism envisaged in the text is also too restrictive and ineffectual. The developing countries, including India, have committed a mistake by agreeing to negotiate on the Special Safeguard Mechanism, rather than insisting on the right to impose quantitative restrictions. The developed countries led by the US have ensured that the protection for agriculture in the developing countries envisaged under the Special Products and Special Safeguard Mechanism are diluted to such an extent that they are rendered meaningless. On the other hand the huge agricultural subsidies provided by the US and other advanced countries will remain.

 The NAMA text also proposes huge cuts in the bound tariff levels of the developing countries. India’s current level of applied industrial tariff is, on average 10%, and the bound level average is 34%. The proposed cut in accordance to the Swiss formula will lead to a drastic reduction of India’s bound tariff level, which will preclude any possibility of providing protection to domestic industries in future. There is also an attempt to push for greater financial liberalization in developing countries under the General Agreement on Trade in Services (GATS). No progress has been made on the outstanding implementation issues, particularly with regard to the amendment to the TRIPS Agreement in order to protect the interests of the developing countries.

 The Bush administration does not have the authority from the US Congress any more to conclude the current WTO negotiations in a credible manner, with the ‘fast-track’ authority having lapsed in July 2007. The US Congress has also enacted the Farms Act in May 2008, which further increases the agricultural subsidies in the US, overriding the veto of the US President. The US negotiators at the WTO do not have any credibility left after this.

 India stands to loose immensely from the proposals on the table. The CPI (M) demands that the Indian Government should reject the revised drafts in the upcoming WTO mini-Ministerial meeting at Geneva. The Indian Government should not yield any further ground in Agriculture or NAMA and the matter must be discussed in the Indian Parliament.