New Delhi, Nov 26: India should aggressively negotiate for a more liberalised trade environment at Seattle, said Ashok Gulati, professor at the Institute of Economic Growth.This would help India in gaining market access in developed countries, some of which have erected huge tariff barriers to protect their farm sector, said Gulati who is also a member of the prime minister's economic advisory council.
He told The Financial Express, "We should demand on ceiling on tariff bindings for any agriculture product at no higher than 50 per cent for any country."
India should also insist on abolition of all quotas and quantitative restrictions, except for the countries which have very adverse BOP situation, Gulati said. "Tariff quotas imposed by developed countries should give way to equivalent tariffs," he added.
Market access, domestic support and export subsidies are three pillars of the agreement on agriculture (AOA), though issues like those of intellectual property rights can also impinge on the AOA, according to Gulati.
As per the AOA, developing countries are supposed to bring down the base tariff by 24 per cent over 10 years and developed countries by 36 per cent over six years.
Unless India adopted bold and aggressive stance for an open trade environment, it would not be able to challenge European and East Asian countries which resist exports from developing nations, Gulati pointed out. "How can we argue for 300 per cent tariff rates and protest against 700 per cent protection on rice in Japan?"
We are efficient produces of all agricultural commodities except edible oils, he said. "So, it is not us who have to fear the liberalised trade environment. It is the European Union (EU) and Japan who should be worried."The EU was the biggest culprit, Gulati said. For, it not only subsidised its farm sector, which was not very efficient, but also encouraged exports, thus introducing distortions in the international market. Japan also subsidised, but at least it did not distort global trade, he said.
India should ally with the Cairns group of countries on the issues related to agriculture at the WTO meet, Gulati said. These were net food-exporting countries and have very low levels of protection. In India, support to agriculture was in the negative.Pertinently, the Cairns group is the champion of free trade. The group comprises Australia, New Zealand, Argentina, Brazil, Chile, Colombia, Uruguay, Malaysia, Indonesia, Thailand, the Philippines, Fiji, Hungary and Canada.
Gulati said that India should insist on the abolition of export subsidies provided by, most conspicuously, European countries. The abolition of such subsidies assumed considerable significance given the fact that Indian agricultural exporters were not beneficiaries of any direct export subsidy, income-tax exemptions on profits notwithstanding.
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