India asked to cut industrial tariff ahead of WTO Geneva meet

New Delhi, June 25 (UNI) Ahead of crucial Mini-Ministerial meeting of over 40 trade ministers in Geneva next week, WTO Director General Pascal Lamy has asked India to ''make necessary compromises'' by agreeing for further tariff cuts on the industrial goods from the developed world.

''I urge Brazil, India, Egypt and other developing countries that constitute the third side of 'the magic triangle' to join in making the necessary compromises next week,'' Mr Lamy said in Geneva at the week-end.

Commerce and Industry Minister Kamal Nath will be reaching Geneva, after his engagements in New York and London. Presently in the US for India-Business Forum meeting, Mr Kamal Nath would be in London on June 27 for the meeting of the India-UK Business Leaders' Forum.

Mr Lamy said while the average industrial tariff worldwide is low, developing country tariffs remain quite high. ''The lowering of developing country tariffs will also be crucial to a successful outcome on this part of the negotiations. High developing country tariffs have stifled competitiveness in their markets, raised the cost of essential goods to consumers, and hampered not only North-South, but also South-South trade'', Mr Lamy said.

However, Mr Lamy referred to the often-repeated complaints of countries like India that the developed countries continue to maintain tariff peaks and escalations.

''Developed country tariffs escalate on many of the products that are of key interest to developing countries, such as textiles'', President of the Associated Chambers of Commerce and Industry of India (Assocham) Anil K Agarwal told UNI.

CII is of the view that developing countries should be asked to keep all sensitive products out of any tariff cuts and they should not be separated into two categories. They should also be allowed to keep some percentage of their tariff lines unbound, Chairman of the WTO and Other Trade Agreements Committee of CII R V Kanoria, said.

Next week is crucial for the Doha Development Agenda negotiations.

A number of ministers, both from the developed countries like the US, European Union and the members of the Group of 20 will be travelling to Geneva with the aim of narrowing differences in two key areas.

These areas are trade opening in industrial and in agricultural goods.

There are many other subjects in the Doha Round, such as the opening of services trade, the refinement of our rules on anti-dumping and the creation of new rules on fisheries subsidies.

''But we can only turn to this long list, with agricultural and industrial goods out of the way '', the WTO Director General said.

The Chairs of the negotiating groups on agriculture and industrial goods have issued what are called 'draft modalities for their negotiations. These documents show wide differences on all these two crucial pillars of the negotiations.

In agriculturel, much of the developing world has placed its demands on the table.

The various forms of subsidies that the rich world had given to its producers, have crowded out farmers from the poor countries putting breaks on their agricultural trade. Furthermore, the very high tariffs on agricultural products have seriously hampered trade flow.

Developing countries also argue that they need these tariffs to counter the effects of rich world subsidies, which lead to the dumping of their produce in developing country markets.

According to Mr Lamy, while the average tariff worldwide on industrial goods is only five per cent, it is 60 per cent on the agricultural goods. In launching the Doha Round, the developing world insisted that these imbalances be corrected, and has since been very active in the negotiations.

He said the failure of the Doha Round would be first and foremost a loss for the developing world. '' We now have a once in a generation opportunity to correct the imbalances in the multilateral trade. I ask that we not waste it''.

The US Trade Promotion Authority defines the role of the US Congress on trade agreements. This Authority has had an important impact on trade policy, not just within the US but worldwide. The calendar of the Doha Round is determined by that Authority, which will expire early next year, and ''before which we are therefore obliged to complete the Doha negotiations'', the WTO chief said.

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