Jaitley offers no hint of WTO progress

Commerce and Industry Minister Arun Jaitley gave no hint on Thursday of any breakthrough in stalled World Trade Organization talks after meeting with US Trade Representative Robert Zoellick.

In a speech to the Carnegie Endowment for International Peace, Jaitley said he and Zoellick have a "much greater understanding" of each country's position after meeting at least three times in the past four months. But he said there were many areas where their views "are not fully convergent."

Top trade officials from the 146 WTO member countries will meet this September in Cancun, Mexico. The United States hopes the meeting will propel the negotiations to a successful end by the current goal of January 2005.

However, talks have been stalled on a number of issues, including agriculture and how to guarantee that poor countries have access to cheap versions of patented life-saving drugs.

Jaitley said it was "extremely important" to resolve the medicine issue before the Cancun meeting. India, which has a large generic drug industry, "reluctantly agreed" last December to a compromise supported by most WTO members only to see it blocked by the United States, he said.

Any agriculture agreement must incorporate India's need to protect its 65 crore (650 million) farmers from import surges, especially as long as rich countries like the United States and the European Union maintain generous subsidies, he said.

Jaitley said Zoellick agreed with him on that point.

But in a shot at the EU, Jaitley said a farm trade pact must actually reduce government support for rich country farmers and not merely "decouple" the payments from planting decisions to make them less trade distorting.

He also said there was a need for "much more discussion" before countries commit to negotiations aimed at developing WTO rules for foreign direct investment, antitrust policy, government procurement and transparency in regulations.