NEW DELHI (AFP) - India's Commerce Minister Arun Jaitley warned that the World Trade Organization (WTO) meeting in Cancun next month could get deadlocked over the developed world's trade-distorting farm subsidies.
In an Economic Times newspaper article Friday, Jaitley said India did not wish to stall the negotiations, but at the same time it could not sell out the interests of 650 million Indians dependent on agriculture.
"The principal area, which is going to occupy a large part of the negotiating space on the way to Cancun and at Cancun, is going to be the agreement on agriculture," said Jaitley.
"We strongly believe in reductions of trade distorting subsidies and not in terms of just decoupling them and readjusting them in some other form because the adverse impact on economies such as ours really tends to hurt us," he said.
"We do not wish to stall the negotiations on agriculture, but we do hope adequate windows of exception for economies like India that are highly dependent on agriculture are created."
Jaitley said the multilateral trade negotiations had to recognise the "ground realities" in a developing country like India where 65 percent of its billion-plus population depends on agriculture.
"We repeatedly emphasise the number of people in India who depend of agriculture for a livelihood. The average size of a landholding is a little more than 1.5 acres. When we negotiate, we have to keep these harsh realities in mind," said Jaitley.
"The United States on the contrary has anything between two to three million farmers. Europe today is in a position to afford a very large quantum of subsidies, both as domestic support subsidies and export subsidies."
"The impact of these really have been to depress prices as far the economies in the developing world are concerned."
Jaitley gave notice that developing countries, 16 of whom have banded together to take on the world's major economies at the talks, will be gunning for the latest US-European Union plan for reforming global agriculture.
Bristling Indian officials have dismissed the EU-US farm proposal, which frees up some areas of agricultural trade but contains no timetable for phasing out farm subsidies, as "tokenism".
"Their proposal is not acceptable as it does not take into account the interests of our farmers," Jaitley, a distinguished Supreme Court lawyer known for driving a hard bargain told AFP.
"We have to give reasonable tariff protection to our farmers. We also need additional tariff protection for sensitive items and special safeguards to stop a surge in imports."
On August 20, the group of 16 developing countries led by India and China unveiled their own proposal on how to reform global farm trade.
The plan, which came a week after the EU-US joint proposal, covers the so-called three pillars of agriculture that have been the trickiest to resolve: market access; domestic support; and export subsidies.
"The thrust of our proposal contemplates a drastic reduction in domestic support, reduction in subsidies and their eventual elimination, and sharp disciplining of export credit," said Jaitley.
The EU and US plan does not foresee the end of all export subsidies, but does call for their elimination on products crucial to developing economies, with reductions elsewhere.
Trade sources said the EU-US proposed formula would still contain enough flexibility for some tariffs to be kept high.
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