Sunday, December 11 2005 10:39 Hrs (IST) - World Time -

New Delhi: Prospects of forward movement in industrial tariffs and services have brightened with India willing to be flexible, but agriculture remains a pricky issue to arrive at any agreement at WTO Ministerial in Hong Kong beginning on Tuesday (Dec 13, 2005).

"Agriculture is not the only issue in WTO. We will move forward in other areas (industrial goods, services, LDC package). Hong Kong is not going to be full modality, post Hong Kong we will be moving forward from framework agreement and heading towards full modalities," Kamal Nath who is leading the Indian negotiating team at the Ministerial has said.

While emphasising that India will not be totally rigid in trade and that the whole strategy of giving something in return for developed countries would be driven by employment generation and economic enhancement in developing countries, Nath said India wanted the developed world to make specific commitments on farm subsidies.

But, Nath made it clear that on no account will the Government make any compromise on livelihood and food security concerns of 650 million poor farmers.

Agriculture, which forms the core of global trade talks, has hit a deadlock with developing countries wanting developed countries, including the US and the EU to make specific commitments on phasing out of their domestic farm support and export subsidies and the latter refusing to improve their offers.

Without improving its offer, the EU is expected to flesh out its offer to cut tariffs and subsidies for more specificity at this week's meeting and wants India and Brazil to move on industrial goods and services.

The EU proposed 60 per cent reduction in highest tariff and 35 per cent and 60 per cent for lower tariffs, bringing its average tariff from 22.8 per cent to 12.2 per cent and 70 per cent reduction in trade distorting farm support.

On the other hand, the US has proposed more ambitious cuts in the range of 55 to 90 per cent for developed countries and reduction in overall trade distorting farm support by 53 per cent. However it wants EU to reduce trade distorting support by 75 per cent.

Developing countries, including India, want phase out of farm subsidies and provision of Special Products and Special Safeguard Mechanism to protect livelihood concerns of its farmers.

With the continuing differences, WTO members have agreed to a March 1, 2006, deadline for an agreement on ending export subsidies indicating clearly that while Hong Kong may see forward movement in form of broad contours of full modalities.

To address the development aspect of the Doha Agenda agreed upon at the Fourth Ministerial conference in 2001, developed and developing countries at WTO are working out a package for Least Developed Countries to provide them duty and quota free access to their markets.