Wto:General Information

The earlier Doha (2001) and Cancun (2003) rounds had failed for precisely this reason and led to the creation of the Group of 20 (g-20) developing nations led by India and Brazil.

the EU agreed to phase out all export subsidies by 2013. The icing on the cake: about 80 per cent of these will be phased out by 2010.

both developed and developing nations had agreed in principle to cut their tariffs on industrial goods like cars, auto components, consumer electronics, FMCG, etc. The question was: by how much? The rich countries advocated a Swiss formula with a high coefficient-which entailed the highest duty cuts on items with the highest tariffs

Certain forms of subsidies, such as production and export promotion, provided by various countries or governments give rise to trade distortions in international trade. To correct these distortions, the WTO is trying to impose a certain discipline by way of an Agreement on Subsidies and Countervailing Measures (ASCM). The perception of developing countries towards the ASCM is that it has serious imbalances. They argue that the subsidies they get for industrialisation and social development have been included in the actionable or prohibited category, implying that they are liable to countervailing duties, while that used by developed countries belong to the non-actionable category and hence exemption from countervailing duties.

"A Development Round of Trade Negotiations?" (Stiglitz and Charlton, 2004), a report prepared for Commonwealth Secretariat, states that the new trade rules and domestic disciplines introduced in the WTO reflect the needs and priorities of developed countries, and not that of developing countries

developed countries, including the US and the UK, have largely used industrial policies and the so-called 'bad' trade policies, such as, infant industry protection and export subsidies, during the initial stages of their development, and now the WTO rules are preventing developing countries from using such practices in their catch-up period.

In Hong Kong, when the talks seemed to be going nowhere, 110 developing countries came together in a grand coalition under the leadership of India and Brazil, and demanded that the us and the EU commit to a 2010 deadline for eliminating agricultural subsidies. Says Nath, who deserves much of the credit for stringing together this alliance: "The rules of global trade are being redefined and the developed world realises that we have the numbers." By applying collective pressure, the coalition managed to push through a declaration that addresses issues of importance to the developing world in agriculture, non-agricultural market access (NAMA) and services. This broke the logjam of the previous ministerial rounds, but could not entirely remove the question mark over the future of multilateral trade negotiations. Adds Dipak Patel, Trade Minister of Zambia and leader of the Least Developed Countries Group within the g-110: "Now that the developing world has come together, the big powers will have to sit and negotiate with us."

The Doha negotiations are focused on further liberalizing trade and removing global tariffs among the 148 nations of the WTO. The administration's action stems from a September 2002 complaint filed by Brazil that maintained the subsidies restrained global cotton prices and were illegal. Brazil said the subsidies cost its farmers more than $600 million in lost sales.

The WTO ruled against the U.S., which appealed. But the WTO ordered the U.S. in March to end the subsidies and to begin the process by July 1.

Cotton farmers, exporters and textile mills received payments of $14.1 billion from 1995 to 2003 under Step 2, according to the Environmental Working Group, which opposes agricultural subsidies. Raking in some of the biggest benefits from the program during the period, cotton spinner Parkdale Mills Inc. received $98 million in subsides, while Avondale Mills Inc. received $86 million, according to the group.

The National Cotton Council said it would make a statement on the administration's move today, but laid out its general position against Brazil's case in a July 2004 statement. Citing a Texas Tech University analysis, then chairman and current adviser Woody Anderson said the U.S. cotton program does not affect world cotton prices by more than 2 percent.

"This is not a significant impact," Anderson said at the time. "I am not apologizing for the U.S. cotton program. It is well designed, well crafted and an important component of the agricultural policy of the United States."

DEVELOPED COUNTRIES: Promised to provide greater market access for agricultural products and promised to adopt a modified Swiss formula to reduce tariffs. Have also agreed to address issues of tariff peaks and tariff escalations on products which interest developing countries.

On the changing face of WTO: Earlier, the US and the EU used to call the shots. Now, India's economical progress and China's emergence as an economic powerhouse means that these two countries account for a large mass of consumers. Also the demographics of the developed countries are working against them. The global