India leads pressure on farm trade

Society Business and Career
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An interesting read. Does anyone know where Pakistan stands on this issue and why?

India leads pressure on farm trade

CANCUN, Mexico (Reuters) --India is putting pressure on the United States and European Union for concessions over farm trade at global commerce talks, insisting all types of subsidy must be cut.

India has lined up with 20 other developing nations to try to force concessions over farm trade from rich countries at troubled World Trade Organization (WTO) negotiations.

“We do not want European farmers to go out of business. We want to save our own farmers,” Commerce Minister Arun Jaitley told Reuters as the WTO meeting got under way.

The talks could determine if the Doha Round of trade liberalization negotiations is completed on time by the end of 2004.

“If the differences or gaps (over agriculture) are to be bridged it certainly will require that developed and richer nations whose subsidies of all kinds have distorted the global agricultural market take a few extra steps,” Jaitley said.

He said even so-called ‘green box’ farm subsidies, which the EU and United States say do not distort trade, needed at least to be tightly disciplined. Some payments should also possibly be eliminated as they helped farmers in the West stay in business and keep dumping food on world markets.

“The onus lies on developed countries to create a level playing field,” said Jaitley, a wealthy corporate lawyer and keen cricket fan who is sometimes mentioned as a future prime minister.

India is a powerful voice at the WTO. When the present talks were launched in the Qatari capital Doha in 2001, it resisted the proposed agenda to the end.

India shelters its economy behind some of the highest tariffs in the world and diplomats said that, with elections due next year, Delhi was not keen to embrace an ambitious market-opening agenda.

Nearly 70 percent of India’s more than one billion people earn a living from agriculture. Jaitley said his country was forced to protect its farmers due to depressed prices for their products and their inability to compete on world markets.

Without progress on trade at Cancun, many countries like India will not open their markets in other areas such as services.

Jaitley said India remained suspicious of attempts by the EU and Japan to add rules on competition, investment, transparency of government procurement and easier customs regulations to the Doha round of negotiations.

India fears such rules would undermine its ability to regulate investment and could give an unfair advantage to foreign firms entering its markets.

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i do remmber reading on the world bank website that pak was having talk with EU to have free trade dont know wat happened after that :p

thanx for the article.. the whole world would be better of with out protectionaism.. the tax payers, the consumers, the efficency and the poor farmers in third world countries :p

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Here is some more information.

Cancun: Winners and losers

The WTO Cancun summit has ended in frustration and deadlock. BBC News Online looks at some of the groups which may have gained and lost from the outcome.

Losers: Brazilian farmers

Farmers in Brazil will be one of the big losers from the failure of the trade talks to tackle agricultural subsidies.
Brazil has one of the biggest and most productive agricultural sectors in the world.

It one of the world’s biggest producers of citrus fruits, coffee, and soybeans, as well as a major cattle producer.

But its farmers are frustrated by the big subsidies and lack of access in many key markets, including the United States.

Brazil had tried to include agricultural subsidies in separate negotiations on a Free Trade Areas of the Americas, but this has been rejected by the US.

Winners: Indian pharmaceutical manufacturers

India is the world’s largest producer of generic drugs.
Many of these drugs are urgently needed in other developing countries, especially in Africa, to fight Aids and other epidemics.

But commitments made at the last round of trade talks would have restricted their ability to export these drugs to third countries without breaching patent protection rules.

Now, under a deal announced just before the Cancun talks - but to be implemented in the next six months - developing countries will have the right to import such drugs from India and other cheaper manufacturers.

Big Western pharmaceutical companies, however, have insisted on safeguards to prevent the medicines being re-exported to the rich countries.

Winners: South African Aids patients

South Africa has the most Aids cases in Africa.
But the government has not had the money to pay for the expensive medicines that can arrest the course of the disease.

Some, including the President, had also questioned the effectiveness of such Western medicine.

Now, under the deal announced just before the Cancun summit, South Africa will be able to import cheap medicines to help the millions of people suffering from the virus.

There will still be problems in many parts of Africa in distributing the medicines, and ensuring that they are stored and used safely.

Winners: European farmers

European farmers are among the most heavily subsidized in the world.
The excess food they produce is often sent to developing countries at low prices, undermining the poorer countries own agriculture.

The EU has tried many times to reform the system of farm price supports - the Common Agricultural Policy.

But it has always refused to agree to phase them out entirely.

Now it appears that small farmers in Europe will have their rural way of life preserved for some time.

Losers: American factory workers

The US manufacturing sector has increasingly relied on exports.
Under the plan that had been proposed by the US during the Cancun trade talks, tariffs on manufactured goods would have been gradually reduced to zero for both rich and poor countries.

This could have boosted US exports to developing countries, many of whom have protected their industrial sectors from foreign competition.

Now US manufacturers will face increasing competition in their home market from products made overseas, but will not find it easier to sell their own exports abroad.

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Personally a lot of the world trade stuff confuses me, so anyone who can explain what went wrong in simple English I’d appreciate it:)

Australian senator condemns India’s role in farming lobby group
http://www.abc.net.au/ra/newstories/RANewsStories_947263.htm
A former Australian trade minister has attacked India’s leadership role in a new lobby group involving more than 20 developing countries.

A senator from the opposition Labor Party, Peter Cook, says India has one of the most protected agricultural sectors in the developing world.

Senator Cook says India helped create a new developing-country farm lobby at the failed meeting of the World Trade Organisation at the weekend, pushing aside the Cairns Group led by Australia.

“To enable India, which is a protectionist economy, to infiltrate itself into this argument and take some leadership of the developing world’s case on agriculture is, I think, just unbelievable,” he said.