Though the commerce ministry may not be averse to displaying some tactical flexibility on tariffs at the World Trade Organisation negotiations, the agriculture ministry is firm that the focus should be on seeking subsidy reductions by developing countries.
"There is no question of participating in any discussion on tariff reduction at the forthcoming WTO ministerial meet at Cancun unless the developed countries agree to simultaneously discuss subsidy reduction issues," Agriculture Minister Rajnath Singh said.
The developed countries, including the world's biggest susidisers, the US and the European Union, are giving annual subsidy of around $360 billion to their farm sectors.
Unless these countries disciplined all kinds of trade-distorting support, including export subsidy and export credits, India could not consider any tariff reduction, Singh said.
A note by the agriculture ministry on the stand to be adopted during the negotiations calls for reforms in the 'green box' which contain the subsidies that are exempted from reductions by the Uruguay agreement.
This has been misused by the developed countries to circumvent subsidy reduction commitments. They have shifted many subsidies from the 'amber box' (where cuts are mandatory) to the green box.
For instance, of about $50 billion US farm subsidies during the Uruguay round base period of 1986-88, the amber box accounted for $25 billion.
But by 1995, the amber box subsidies were reduced to just $7 billion though the total US farm subsidies had risen further to about $61 billion. The green box got swollen to $50 billion.
Thus, instead of reducing the subsidies, as stipulated by the WTO agreement on agreement, the US actually found way to increase them further, the note points out.
The agriculture ministry also feels that the export subsidies and export credits are the most trade-distorting measures and, thus, need to be done away with.
The ministry is seeking elimination of export subsidies, especially on the products of interest to the developing countries.
On the issue of market access, the ministry wants the developed countries to provide greater market access for the products of the developing countries and not the other way round.
For this, those countries should discontinue practices like selective high tariffs, sanitary and phytosanitary measures and technical barriers to trade.
Asserting that the issue of food and livelihood security is of paramount importance to India, the ministry's note argues that protection against undue imports through the tariff route was necessary under the present highly distorted trade regime.
"It is important for the developing countries to stick to the Uruguay Round tariff reduction formula (average reduction of 24 per cent and minimum 10 per cent cut in bound duties)", the note categorically states.
The ministry is also for having a list of special products with lesser tariff reduction commitments for the developing countries.
Besides, the special safeguards mechanism, now available largely to the developed countries, should also be available to the developing countries.
In a nutshell, the agriculture ministry intends to seek the following: more effective and substantive reduction in domestic support, including green box reforms; protection of the livelihood and interests of farmers of developing countries; and elimination of tariff peaks and tariff escalation in developed countries for greater market access of developing countries' products.
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