The Telegraph
Since 1st March, 1999
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Flight to Cancun under shadow of Singapore

New Delhi, Aug. 31: The government seems to have hammered together “plan B” for Cancun in case the advanced countries succeed in melting the resistance of the vast chunk of developing countries on the controversial Singapore issues.

Sources disclosed that the issue was discussed at the meeting of the Cabinet committee on WTO on August 23. Since several underdeveloped countries in Africa, Latin America and Asia are heavily dependent on the western nations for their economic survival the possibility that India’s strong stand on key issues may leave it isolated cannot be ruled out.

Indian negotiators are expected to strongly argue for treating each Singapore issue separately. India plans to stay firm on its stand that foreign direct investment which has been included in the Singapore package is not trade-related and, therefore, should not be included in the WTO negotiations.

However, in case the resistance of the other developing countries melts down, India is likely to allow for some flexibility in its position on trade facilitation, transparency in government procurement and competition policy which constitute the remaining three Singapore issues.

The change in strategy has also been necessitated by the fact that the wide rift between the US and the EU on agricultural issues has narrowed down. The rift had worked in favour of the developing countries insofar as it helped to slow down the pace of the negotiations. However, with the patch-up in place the developing countries now face a formidable opposition.

At the outset, India is expected to stick to its stand that the clarification process on Singapore issues should continue as there are differences even within the proponents of the package as to what they exactly want. Given the wide differences and prevailing confusion on the issues, the time is not right for the modalities to be discussed at Cancun.

India, however, will continue to retain the moral high ground in arguing for a development perspective to the agenda at Cancun around which the developing countries can rally.

The US and EU trade envoys are expected to be put on the defensive over the multi-billion dollar domestic support and export subsidies that they are doling out to their farmers.

India has already opposed the revised draft ministerial text proposed for the Cancun meeting on the ground that it does not provide the developing countries with the necessary levels of comfort to make major contributions in market access expected by the developed nations.

India has reasoned that WTO members should realise that there are two categories of countries. One with deep pockets who subsidise their agriculture heavily, leading to distortions and the other who have no financial resources to provide support to their farmers even when it is required.

It has pointed out that the framework for tariff reduction worked out by the European Commission and the US was tailor made to suit their tariff structure and enable them to make minimal contribution to market access, while on the other hand it placed an excessively high burden on many developing countries.

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