India & the World Trade Organization |
Agriculture The Agreement on Agriculture is coming up for review in the year 2000. In the words of A.V. Ganesan, "the root cause of distortion of international trade in agriculture is the massive domestic subsidies given by industrialised countries to their agricultural sector over the decades. This has led to excessive production (as well as of import restrictions to keep out foreign agricultural products from their domestic markets) and its dumping in international markets. In order to minimise such dumped exports and to keep their markets open for efficient agricultural producers of the world, the starting point has to be the reduction of the domestic production subsidies given by the industrialised countries, followed by reduction of export subsidies and the volume of subsidised exports, and minimum market access opportunity for foreign agricultural producers". This being the rationale, the Agreement on Agriculture provided for (a) reduction of domestic subsidies, (b) reduction in export subsidies, and (c) tariff binding and progressive reduction of tariffs in agricultural commodities i.e., market access. Under the Uruguay Round, we have not made any commitments regarding market access, reduction of subsidies or tariffs since we are under a balance of payments cover. We were committed only to bind our tariffs which we have done, at 100% for primary products, 150% for processed products and 300% for edible oils. However, in course of time there may be pressure on developing countries including India to provide some market access as well as lower tariff bindings. We are studying the implications on the Agreement on Agriculture further and have been presenting papers reflecting our concerns in the process of Analysis and Information Exchange which is now ongoing in the WTO, as a run up to the fresh negotiations in Agriculture in the year 2000.We have, amongst other things, expressed our concerns regarding Food Security and safeguarding rural employment, for which we need some flexibility under the provisions for domestic support. We are also questioning the extremely high subsidies and tariff walls even now being maintained by the developed countries, although they are committed to reduction of both under the Uruguay Round. Better market access for our agricultural products is being sought by us. Broadly, India’s approach to the review of the Agreement on Agriculture is that it would give us an opportunity to have a fresh look at this area from the development perspective and the needs of developing countries, as a number of inequities still remained in the implementation of the Agreement. Under Article XXVIII of GATT, we have already sought renegotiations of tariff bindings of certain critical agricultural products. Under the Uruguay Round, we had bound tariffs on these commodities at zero or very low levels. While seeking higher bindings for these commodities, we have to offer compensation to holders of initial negotiating rights and principal supplying interests by lower bindings in respect of other items of export interest to them. Initial negotiations have been held with the US, EC, Australia and Argentina. |