The WTO talks, to foster world trade failed on tuesday. India and China did not find the aggrement good to help the farmers and hence did not comply to it. Kamal nath played a major role.
What is WTO talks:
The first session of WTO talks started in 2001 to bring a consensus among the world counties about how trade practices can be carried out so that it is a win-win situation for all the countries. This recent failure after 7 years since its inception is an indication of the changes in the world economy, with India, China & Brazil emerging as the powerhouses.
Essentially this essense of WTO talks was that the European Union and U.S. would lower farm subsidies and tariffs in exchange for China, India, Brazil and other emerging economies opening up their markets for industrial goods like chemicals and cars.
Why did the talks fail:
India & China were asking for Special Safegauds Mechanism (SSM) for the developing countries if imports had to be increased which was not agreed upon by the US. SSM would enable developing countries to raise agricultural tariffs to protect their farmers in case of a surge in imports. US did not agree on the Asian countries’ right to impose emergency tariffs to protect their farmers .
Earlier U.S. capped its trade-distorting farm subsidies at $14.5 billion. What does this mean? US provides subsidies to its agricultural sector, thus the production of goods is at a subsidised rates and the price of their goods do not get affected due to import policy/rules of US. Thus farmers in US gain from the subsidies. Over the weekend, India and China doubled their opposition, India’s trade and commerce minister, Kamal Nath, and then Chinese diplomats, refused to compromise with the U.S. In particular, we demanded a rule that would allow them to impose special tariffs if imports surged in certain products like sugar, cotton and rice.
US wants India and China to open up markets for agricultual goods which they produce at a large quantity as a result of hge subsidies provided by the US. We did not agree to this because, if we open the market locally produced agricultural goods may not seek profits as a result of huge supply. If imports surge in India, the farmers will be affected, which leads to many farmers quitting agriculture and .. less production in india… agriculture occupation gets affected…. imports needs to increased .. and world countries might capitalise on it… we do not want this situation. And thus we wanted to a rule to impose tariffs on certain goods if imports needs to be increased.
Thus unless US reduces its susidies or SSM is agreed that would help the interest of india , china and other developing counties, the deal may not go on.
At this point in time, Commerce Minsiter has tried to protect the farmers and agricultural occupation in India and several other countries (almost 100). It is not a US vs India/China. It is only that India/China were leading the discussion.
What if WTO talks fail?
It is also a blow to the world economy in terms of trade practices at a age when all developing countries are looking for globalisation. This WTO aggrement would have opened global markets for trade of various products and commodities, …… BUT farmers in developing countries had to be taken care of….
But certain other african nations grieve, as they would have benefitted from the deal in terms of banana and cotton exports from poor nations.
One point came to limelight in the talks:
“DEALS ARE NO LONGER MADE ONLY BY RICH COUNTRIES. THE EMERGING MARKETS HAVE TO BE TAKEN INTO ACCOUNT. DEALS CAN’T BE MADE FOR THE SELF INTERST OF RICH NATIONS”
INDIA SEEMS TO EMERGE AS A POWERFUL COUNTRY. BUT WITH POWER COMES GREATER RESPONSIBILITY.
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