In a proposal to the World Trade Organization (WTO) last week, the US said the self-declared development status risks the institutional relevance of the organisation and collapse of negotiations.
Lashing out at India, it said the country used its status as a developing member to press for continued exemption from its commitments of some $30 billion in input subsidies, a rule intended to address development for some of the poorest farmers in the world.
“Under this massive subsidy scheme, India would continue to receive the same exemption as that of a country like Rwanda,” said the US proposal, which is likely to be discussed this week at the WTO meeting on the sidelines of the World Economic Forum in Davos.
This is the latest salvo by the US to reform WTO after its transparency submission in November last year when it had proposed punitive action on countries if they introduce or increase subsidies for domestic industry without reporting to the organisation.
“The US has said that all developing countries should not be considered as one lot but there should be differentiation among them,” an official aware of the proposal told ET. “It has tried to hit as many emerging economies as possible and break them.”
Another negotiator said, “This is targeted at emerging economies. It is all proceeding in a planned way.”
The US paper also cited a joint proposal by China and India that called for elimination of the trade distorting subsidies only for developed members, as a prerequisite for self-declared developing members to make any domestic support reforms.
The US claimed there is a paralysis in WTO wherein any country can “self-declare” as a developing member and assert its right to benefit from special and differentiation treatment such as longer implementation timeframes.
“By demanding the same flexibilities as much smaller, poorer members, export powerhouses and other relatively advanced members create asymmetries that ensure that ambition levels in WTO negotiations remain far too weak to sustain viable outcomes,” it said. “This is untenable.”
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