WTO Meeting Concludes in New Delhi

"I believe we have come a long way; we are not far from journey’s end,” Pascal Lamy, the head of the World Trade Organization or the WTO recently made these comments signaling a renewal of his commitment to conclude the Doha round of talks.

Deadlock between major trade blocs on farm subsidies in rich economies and tariffs on industrial goods in developing countries has delayed and even stalled the talks several times. The last push towards a conclusion of the Doha round happened in Geneva last year, India's disagreement with the United States over the subsidies for poor farmers was blamed for the collapse of the negotiations.

Dr Shubhada Rao, the Chief Economist at the Yes Bank in India's financial capital Mumbai said: “The key concern naturally for any economy would be to maintain the livelihood security and India was quite firm in its stance to maintain that and of course the inability for the other developed markets to allow its services, India’s services, having an equal market access. I think that is where probably, India got singled out for the break down of talks."

Challenges before conclusion

Though Lamy claimed the meeting in New Delhi was the beginning of the end game, the Indian Commerce Minister Anand Sharma cautioned that there were challenges over unresolved issues in the talks. “India’s stance is quite clear,” says Shubhada Rao.

“It needs to protect the livelihood security of its farmers when India opens up its domestic market. I think as an equal measure, Indian services sector and the SME should also have a greater market access in the world. This would be essentially a larger stake for India and the other group of countries meeting together to make Doha a success."

Disagreement over farm subsidies

Developing countries like Brazil and India have been calling on developed economies like the United States and the EU to cut their farm subsidies. Farm subsidies have been one of the main reasons behind the reluctance of India and Brazil to open their markets. Some countries have been making indirect references to the United States in a bid to change the course of the Doha talks.

"Perhaps US would be more sensitive to these factors of mutual dependence on the emerging countries,” says Shubhada Rao. “Because let's not forget speedier recovery would be dependent on how cost effective you are and which would in turn be dependent on you being more open to trade of goods and services. So emerging markets are becoming more important in negotiations for the WTO rounds."

During the talks, the US trade representative, Ron Kirk stressed the urgent need to fill in the gaps in the Doha agreements. Some leaders pointed out that during the global economic crisis was the best time to conclude the Doha round of talks.

Author:Pukhraj Choudhary
Editor: Grahame Lucas