• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

G. Srinivasan

"We want to make our development aid efficient and trade-enhancing which is possible if we address one by one the number of bottlenecks so that India would be able to match our sanitary and phytosanitary standards. It is not a question of conditionality. We do not negotiate on standards," says Mr. Lamy

NEW DELHI, March 14

THE visiting Trade Commissioner of European Union, Mr Pascal Lamy, has said that his proposal for creating a strong link between domestic rule-making and development aid is not a new effort to impose conditionality on aid recipients.

In an interface with Business Line here, he denied the new proposal as anything like the tied-aid concept of the past, which the EU has outlived long ago. "We want to make our development assistance more efficient and more trade-enhancing which is possible if we address one by one the number of bottlenecks so that India would be able to match our sanitary and phytosanitary standards. It is not a question of conditionality. We do not negotiate on standards. But if India has problems in matching our sanitary and phytosanitary standards, then we can direct part of our assistance in building domestic capacity."

To the extent that future WTO rules imply positive action in members to build institutional capacity, infrastructure, there would be a need for resources, he said, adding "that is why several of the new rule making areas - for instance, modernising customs or setting up domestic competition regime - would prefigure assistance as part of the deal."

He stated that ultimately it was a question of "how far India wants to move for the sake of modernising its economy and how much of it would be by way of gains through multilateral negotiations in areas such as competition, investment and industrial tariffs."

To a specific query as to the so-called "convergence" of views between India and the EU on important issues in the run-up to the Cancun Ministerial in September, 2003, he said that agriculture was "clearly" one area where there was a consensus as both the EU and India had highlighted how the costly subsidies doled out to this sector in the rich world had distorted the global grain market.

That is why, he said, the EU proposal for agricultural negotiations in WTO would not only slash EU import tariffs by more than a third, export subsidies by nearly half and reduce trade-distorting farm support by more than half but also contained the idea that rich countries should ensure that access at zero duty should be applied to at least 50 per cent of their imports from developing countries and special safeguards for crops that hold key to their food security.

He said there is also convergence on industrial tariffs. "India wants us to address the issue of tariff peaks and we are ready to address it. We want India to move fast on this and the latest budget has brought down the peak tariff rate. We understand that India cannot move as much as we want it to," he added. He observed that India-EU bilateral trade volume could be stepped up. He said that trade between the two countries was booming and though India sought a special textile package and even without this package, the textile exports from India which were $3 billion four years ago is now above $4 billion and is "moving in the right direction".

Asked about the differences between India and the EU on the four Singapore issues such as competition, investment, transparency in government procurement and trade facilitation, Mr Lamy remarked that India has "moved internally on competition and on investment in ways that do not create any serious problem with what we seek by way of negotiations for an agreement as India has already WTO-plus in competition with a competition law which it has devised to benefit its industry internally. This it could use in any negotiations in future as negotiating points in other domains and there would be a sort of win-win situation."

When asked about the growing rift between the EU and the US, the two big elephants as he put it, Mr Lamy said that for all the spats on issues such as steel, anti-dumping and banana, both the trade majors have always respected multilateral system, discipline and dispute settlement, even as they steered clear of controversial issues through bilateral talks.

"There is no contradiction in this," he said. He, however, said that after both of them had initially agreed on the Doha Development Agenda, "now we are reaching a stage where position of each player is becoming clear. This is true of the US, the EU, Japan, India and African Group and Brazil and lot of proposals have been tabled and negotiations are moving on the right track".

Article E-Mail :: Comment :: Syndication

Stories in this Section
Safeguard probe on Bisphenol imports

Copyright © 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line