Commerce Ministry starts inter-ministerial talks on WTO decisions

New Delhi: The Commerce Ministry has begun an inter-ministerial exercise to assess implications of the decisions taken at the WTO's Nairobi meeting and find out the extent to which India can liberalise tariff regime, especially with regard to the farm sector.

The ministry is holding a series of discussions with the ministries concerned, Commerce Secretary Rita Teaotia said here at a CII function.

The discussions covered "the consequence of any decision that has been taken at Nairobi Ministerial for them (the ministries) and in what manner do we structure our domestic policies to utilise the freedom provided under the multilateral framework to support our industry".

These also included "the kind of support that is not possible or will not be possible in years ahead and how we respond to that".

The two-day inter-ministerial consultation concluded last week.

The secretary said the ministry has discussed subsidies and duty caps on several farm items with the Agriculture Ministry and briefed it on the outcome of the Nairobi meeting.

Additional Secretary of the Department of Commerce Arvind Mehta said the Agriculture Ministry has been asked about "their red lines so that we know as negotiators what your real red lines are going to be" as the world is going to demand zero duty on 100 per cent of tariff lines or products.

In the consultation process, he said the Agriculture Ministry wants to have a higher degree of protection and "they do not wish to see liberalisation happen very fast".

The ministry has also sought views of the Department of Revenue on the problem of inverted duty structure.

"If you want to tackle this, you tell us from your side which are the products that will be the ones where you do not wish to see the inverted duty structure and any kind of zero (duty)," he added.

At the WTO's Nairobi meet in December 2015, the members committed to giving developing nations a right to take recourse to special safeguard mechanism to protect their farmers from a sudden surge in imports or drop in global prices.

The WTO's declaration also provides for a ministerial affirmation that till such time a permanent solution on public stock holding is found, the peace clause shall continue to be in place. 

Further, Teaotia said that in WTO's Nairobi meet, it was clearly articulated that the issues that had been flagged for the Doha Development Agenda (DDA) would continue.

India has expressed disappointment over non-reaffirmation of the long-stalled Doha Round in that meeting. The WTO declaration too mentioned about the differences among the members on the matter.

The Doha Round of negotiations, launched in 2001, remained stalled due to differences between the rich and developing nations, mainly on the level of protection for farmers in developing countries.

Talking about the issues which may come up going ahead, she said India expects to see some movement and efforts in bringing new issues on the WTO table.

"However, our clear position is that first let us deal with the outstanding issues of the DDA, those issues have been very clearly articulated and those need to addressed," she said.

She said that introduction of new issues in the WTO must happen after full consensus of all members.

Developed countries, including the US, want WTO members to discuss new issues such as investments and e-commerce and not the pending agenda of the DDA.

"The concern here is that the issue of special and differential treatment provisions, which are inherent part of the DDA. There is an effort to say that India is one of the fastest growing countries in the world, therefore you cannot be treated as a developing country...this is a very smug kind

of argument for the country which has largest number of poor in the globe," Teaotia said.

Also, a new trend is emerging in the WTO which India has to be alert about and that is movement away from a consensus based decision making, she said.

Citing the example of the second Information Technology Agreement (ITA), she said if one goes by consensus, the ITA-II would not exist. India was part of the first such pact.

"ITA-II eliminates tariff on 201 IT products...We are quite clear that over the years, electronic products have become one of the largest components of our import basket and to a great extent our ratification of ITA-I has hampered the growth of the Indian electronics sector and now we cannot

afford to take either this time or near future," she said.