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India upset over Cancun draft

By C. Rammanohar Reddy

CANCUN SEPT. 14. The World Trade Organisation is struggling to reach an agreement on how to breathe new life into the Doha round of trade negotiations after a draft declaration presented at the ministerial conference here on Saturday was attacked by all developing and many developed countries for ignoring their concerns; only the United States and the European Union said the text was an acceptable basis for a final agreement.

Arun Jaitley, the Union Minister for Commerce and Industry, yesterday strongly criticised the declaration, saying India felt the text "does not lend itself to any meaningful dialogue" on the Doha round as it had "arbitrarily disregarded the views and concerns expressed by India" on the major issues.

The revised draft prepared by the conference chairman, Luis Ernesto Debrez of Mexico, outlines a framework for negotiations on agriculture that accommodates U.S. and E.U. interests much more than that of the Group of 21 developing countries. It proposes only a modest cut in rich country subsidies but demands major reductions in tariffs in the developing countries. On the Singapore issues, the text proposes, as reported on Saturday, that the WTO begin talks immediately on transparency in government procurement and trade facilitation. It also calls for negotiations on the controversial issue of investment once an agreement is reached on the modalities of agricultural trade liberalisation.

A select group of Ministers, including from the E.U., U.S., India, China and Brazil, are meeting this morning in an attempt to bridge differences on the last day of the conference. Late night consultations did not narrow gaps and, more ominously, the U.S. and the E.U. said "each delegation would be responsible for what happened that night," a veiled threat that countries critical of the declaration would be responsible for a collapse at Cancun.

The new draft puts India in considerable difficulty since it would require the country to eventually make substantial reductions in import duties on agricultural products. In investment, the proposal that countries commit themselves to launch a new global treaty on investment means that this Singapore issue is finally on the table in spite of years of Indian resistance. It is only in industrial products that the text proposes a framework agreement that could be interpreted as in line with Indian interests to some extent.

On Saturday evening, few countries had anything positive to say about the declaration they were being asked to sign. Japan said it would "fight to the end" to modify the proposal to limit its capacity to maintain high tariffs in agriculture.

Much now depends on how far the unity of the G-21 would hold in tense close-door negotiations. Publicly, the major members of the group have all been critical of Mr. Debrez' proposals, but in private officials from some of the agricultural exporters among the G-21 said they were pleased with the revised declaration as it was a significant improvement over earlier proposals.

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