The Hindu Business Line : Duty-bound on WTO

In his Budget Speech, the Finance Minister, Mr P. Chidambaram, said quite clearly that the reduction in peak Customs duties on non-agricultural products, from 12.5 per cent to 10 per cent, was part of the ongoing process of bringing down the rates to "comparable East Asian rates". Admittedly, there is still some way to go before the targeted compatibility is achieved (East Asian peak rates are around 8 per cent). However, the more important point is that New Delhi is sticking to its promise of reducing import tariffs, which should give the lie to the efforts of those among its negotiating partners trying to project the view that India is not doing enough to resolve the Doha Round deadlock.

The latest critique of New Delhi's stand has come from Canberra, the visiting Australian Trade Minister, Mr Warren Truss, pointing out that India "had a big role to play" in the talks by virtue of its position in the developing world and that it could take the lead by further liberalising its economy and "reducing tariffs". As a point of general principle, the Minister's statement is unexceptionable, but it would have been far more realistic (and acceptable) if he had also drawn attention to the fact that New Delhi, despite the pressing political constraints, was on the job as it were and that, more important, other major players in the Doha Round negotiations should do their bit equally effectively if the talks were to make substantive progress. Apart from the Australians, Americans too have sent the same message with the US Trade Representative, Ms Susan Schwab, being quoted as saying that India was not being as `proactive' as it should be in the negotiations and that it was "unwilling to play a leadership role". This, in other words, means New Delhi has not been making the trade concessions expected of it. This is not only an "inaccurate and unfortunate" sentiment (to quote New Delhi's official reaction) but also quite unfair as besides ignoring the progressive steps being taken by the Government to reduce tariffs in select sectors it implicitly turns a blind eye to the little concessions made by such crucial players as the EU and US.

Indeed, in a recent report, the World Trade Organisation itself has pointed to the increase in average duties on farm goods entering the EU in 2005 (18.6 per cent) compared to the previous year (16.5 per cent), which is not exactly what is required now if the Doha Round negotiations are to be given a fair chance of success. As regards the US, the new Farm Bill does not hold out much promise either for a reduction of domestic farm subsidies, specifically on the scale sought by Brussels and others. Clearly, the outlook for the resumed WTO talks is not promising, for which developing-world players such as India are not responsible.