G-20 Calls for Elimination of Export Subsidies

Original Publication Date: 
19 Marzo, 2005

OUR ECONOMY BUREAU{Posted online} : Sunday, March 20, 2005 at 0000 hours IST

NEW DELHI, MARCH 19: The G-20 has advocated a tariff reduction formula containing progressivity, proportionality and flexibility. The declaration adopted at the end of the two-day G-20 ministerial meeting in New Delhi on Saturday stated that the issue of conversion of non-ad valorem (NAV) or specific duties into ad valorem duties was “non-negotiable”.It also called for substantial reductions in trade distorting domestic support and elimination of export subsidies in agriculture within five years with front-loading commitments.

On the issue of conversion of specific duties (per-unit based) into ad valorem duties (based on value), the declaration cautioned against attempts at hiding the true level of protection in this exercise and stressed on the non-negotiable nature of this issue. “The ministers stressed the need to finally bind all NAV duties into ad valorem terms”, the declaration said.

Addressing a press conference, commerce and industry minister Kamal Nath said that conversion of non-ad valorem duties into ad valorem duties will bring about transparency, clarity and openness to the duty structure benefitting all countries.

The G-20 ministers also cautioned against attempts by developed countries to divide developing nations through further categorisation.

Trade minister of Zambia, Deepak Patel, speaking on behalf of least developed countries (LDCs), said that LDCs did not want such divisions. “There cannot be further categorisation of developing countries. The fact that G-20 comprises various shades of developing nations goes to show we are united,” he said.

Brazilian foreign minister and G-20 coordinator Celso Amorim stated that the G-20 has not only to meet more frequently but also has to engage with others to move its agenda ahead.

The tariff formula proposed in the declaration calls for deeper cuts to higher bound tariffs, lesser reduction commitments for developing countries and flexibility to take account of the sensitive nature of some products without undermining the overall objective of the reduction formula and ensuring substantial improvement in market access for all products.

Ministers stressed that special and differential treatment for developing countries must constitute an integral part of all elements with a view to preserving food security, rural development and livelihood concerns of millions of people depending on the agriculture sector.

The declaration also called for elimination of tariff escalation and disciplining of blue box and green box support in order to avoid box shifting.

In a bid to take LDCs on board, the G-20 ministers also highlighted their support for provisions exempting them from any reduction commitments and for steps to be taken to promote the export capacities, including the need to address the supply constraints of LDCs.