Last week, developing countries, including India, said agriculture held the key to the successful completion of the Doha round of trade talks under the World Trade Organisation.
"Achieving the objective of establishing modalities as soon as possible has continued to remain elusive. As matters stand, collective guidance and decisions are required on a number of key issues in order to clear the way for reaching the goal set out in the Doha mandate," Stuart Harbitson, chairman of the agriculture negotiations committee, said in a report circulated on July 7.
In New Delhi, however, commerce ministry officials are now predicting an end to the stalemate between the United States and the Cairns group (comprising countries like Australia, Brazil and South Africa) on the one hand and the European Union on the other.
With EU members not yielding much ground on the Common Agriculture Programme last month, Indian officials and trade experts fear a deal between the US and the EU will put the issue of agricultural subsidies on the backburner and market access will become the sole agenda.
The officials said though the US had been asking the EU to cut export subsidies on agricultural products, the US Farm Bill also sought to provide a high level of subsidies to farmers.
The aggressive stance taken by the US against EU's export subsidies has meant that it has managed to divert attention from its own Bill. But developing countries, like India, are joining hands to ask the US to undertake a reduction of its agricultural subsidies.
The commerce ministry is in the process of working out details of subsidies extended by the developed countries. According to estimates, subsidies have increased even after the Uruguay Round, from an average level of $238 billion in 1986-88 to $248 billion in 1999-2001.
According to the Organisation for Economic Cooperation and Development, however, total support to the sector has decreased to $311 billion in 2001 from $321 billion in 2000, but continued to be 1.3 per cent of the GDP of OECD countries.
An OECD report said Japan had the highest producer support estimate among the US, EU, Canada and Japan. It was followed by the EU and the US.
On its part, India has been seeking a reduction in subsidies and wants special safeguards for developing countries where duties are reduced. New Delhi is, however, not perturbed about the stalemate. However, a lack of progress on agriculture will hamper India's interests in other areas, like services.
Geographical indications
A group of 22 countries, including India, have submitted a proposal listing out the benefits of extending geographical indications to products, other than wines and spirits.
"Extension will open new market opportunities by preventing trade distortions. The benefits resulting from extension will foster development of local rural communities and encourage quality agricultural and industrial policy. In a time of trade liberalisation in these sectors, extension will help make geographical indications a valuable tool for the marketing and promotion of quality products from developing and developed countries alike," the proposal said.
Some WTO members, including Switzerland and the EU, have argued that there are no commercial, economic or legal reasons to limit effective protection only to geographical indications for wines and spirits as the extension will result in more effective protection. They have also argued that extension "does not demand rollback protection."
Besides, the exception to protection provided for in the trade-related intellectual property rights agreement will continue to apply and will provide the necessary flexibility for its application.
These exceptions include reasons such as established long-term use of geographical indications in good faith for products not having the corresponding origin, or indications which are already used generically in a member state.
At Doha in 2001, ministers had agreed to the establishment of a multilateral system of notification and registration of geographical indications by the Cancun ministerial.
In his report, Eui-yong Chung, the chairman of the council on Trips, said that positions continue to be quite divided with "profound differences on the legal effect of registrations, international mechanisms for settling differences regarding geographical indications and participation of various countries."
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