News From CUTS-July 2006

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Doha Round To Remain in Cold Storage: T N Srinivasan

July 29, 2006, New Delhi, Press Release

“At present the Doha round has boiled down to mere sloganeering, without addressing the fundamental issues of negotiations,” said Prof. T N Srinivasan, a noted trade economist of the Yale University, USA. While the Indian Commerce Minister at Geneva last week said that India is ready to negotiate commerce but not subsistence, developed countries argue that “Indias, Brazils and Chinas” of this world should open up their market. Given the prevailing imbroglio, in all likelihood the Doha round is to remain in cold storage for several years.

He was delivering a lecture on “The Future of the Global Trading System: Doha Round and Beyond”. This was organized by CUTS International to celebrate the 10th anniversary of the CUTS Centre for International Trade, Economics & Environment (CUTS-CITEE). The meeting was chaired by Dr. Kirit Parikh, an eminent economist and member of the Planning Commission.

Prof. Srinivasan was critical of India’s stance on Special Products in agriculture negotiations. Simply mouthing out demand for a large number without looking at its welfare implications is not going to serve any purpose. The identification of Special Products must be based and backed up by sound credible research. Responding to this Indian Commerce Secretary Shri S N Menon said that India has identified products and tariff lines after doing extensive research and consultations with the stakeholders. The Planning Commission of India is extensively involved in this exercise besides other major think tanks.

On the issue of bilateral trade agreements, it is very important to identify our partners, speakers said. One must understand that going with large number of negative lists will not lead us anywhere. However, Prof. Srinivasan warned India of going for bilateral with USA. With USA it is very difficult to get a good deal because of its tendencies to press for inclusion of TRIPs plus commitments, labour and other non-trade issues in the negotiating agenda.

Taking forward the discussion, the Commerce Secretary Shri Menon said that India has shown flexibility in the negotiations given the fact that it was not a demandeur of the Doha round. In manufacturing, India has brought down its average tariffs substantially to 12.5% and will continue to reduce them. On services India has tried to work closely with the USA and co-sponsored some submissions.

CUTS Secretary General Pradeep Mehta highlighted the important role that the organisation has been playing over a decade. When CUTS started its work on trade issues in early 1990s, any possible role by a consumer organization in trade policy research and policymaking was looked at with scepticism. However, CUTS beat all such scepticism by not only raising awareness level of different stakeholders’ groups but also doing credible research and analysis, which provided significant inputs in the policy-making process in India and other countries.

For further details please contact:
Vijay Singh, 9818250102
Bipul Chatterjee, 09829285921

It’s time for Lamy to Wear Dunkel’s Hat

July 26, 2006, New Delhi, Press Release

“History repeats itself is a cliché, but we should learn from the Uruguay Round negotiations and continue our strive towards liberalising the multilateral trading system,” said Pradeep Mehta, the head of CUTS International while releasing a statement on the recent collapse of WTO talks. Incidentally, in 1990 the Uruguay Round talks were collapsed because of differences between EU and US over farm liberalisation. The then head of GATT, Arthur Dunkel then came forward and produced a forward-looking text, which was known as the Dunkel Draft. It is time that the present head of the WTO, Pascal Lamy take a similar step, Mehta said.

However, Lamy’s job will be much more difficult than Dunkel’s. A greater number of players are now involved with negotiations, as stakes are much higher than in early 90s. Issues are more complex. In the words of Lamy: “The United States must offer deeper cuts in its farm subsidies, the European Union must further drop barriers to farm goods’ imports and the big developing countries must agree to open up their markets for industrial goods.” On the last point, India is insisting that distortions in farm trade should be removed first before any move on other fronts. India has blamed the US for the current round of impasse and predicted that it will take months and years to put the Doha Round of negotiations back on track.

“A no-deal is certainly better than a bad-deal, but we should keep in mind pitfalls of a failure of Doha negotiations and act on several fronts,” Mehta argued. A likely pitfall could be that trade disputes (on account of trade remedial measures and otherwise) will increase and developing countries may be at a receiving end. Secondly, there may be increasing use of non-tariff measures with significant negative implications on the livelihoods of the poor.

Indian trade minister, Kamal Nath has rightly hinted that the focus of trade liberalisation will now shift to bilateral and regional agreements. Such preferential trading arrangements can be used as building blocs for trade liberalisation, but unless appropriate safeguards are taken they may not be as beneficial as one would like to think. India is about to start discussions with the European Union for a comprehensive economic cooperation agreement. On the other hand, the Association of South East Asian Nations (ASEAN) has unilaterally suspended its negotiations with India on a free trade agreement, citing that India is refusing to open up its market for those products, which are important for ASEAN countries.

For further details please contact:
Bipul Chatterjee: 09829285921
Mani Lamba: 9910445526

CAS Yes, But With No Bouquets: CUTS International

July 20, 2006, New Delhi, Press Release

In view of the Delhi High Court Order to implement CAS on or before 1 January, 2007, CUTS International has stated that to ensure success of CAS this time, bouquets should be banned and there should be a maximum retail price for pay channels.

The Delhi High Court’s order has set the ball rolling for implementation of CAS on or before 1 January 2007 in the three metros of Mumbai, Kolkata and Delhi thus giving the consumers in the three metros the option to choose the pay channel they want to watch.

One of the intended benefits of CAS is that consumer is able to choose channels of his/her choice. In order to ensure this, TRAI has been gearing to regulate the maximum allowable discount on a bouquet of channels to ensure that the price of an individual channel vis-à-vis bouquet of channel does not nullify the choice of individual channels. This was one of the key factors for failure of CAS the last time, as a-la-carte channels were priced against bouquets in such a manner that consumers did not have a real option to choose pay channels on a-la-carte basis.

By introducing the concept of bouquet, we are moving away from the very rationale for introducing CAS, which seeks to provide consumers a tool to choose individual channels. Further, the introduction of bouquet brings along with it several complexities, a press statement issued by CUTS states.

First, the maximum allowable discount has to be determined to ensure that bundling of channels through bouquets does not nullify the individual choice (Here again, the focus is on protecting individual choice). This would require great amount of efforts on the part of TRAI to determine an ‘acceptable’ maximum allowable discount.

Another complexity that would arise, when a broadcaster includes a popular channel in various bouquets and chooses one of these bouquets as the reference bouquet for ensuring that it is complying with the regulation on maximum allowable discount. This way, the broadcaster would be able to fix a higher price for a popular channel by selecting a reference bouquet that allows it to do so. This would nullify the regulation on maximum allowable discount. For these reasons, forming of bouquets should not be permitted.

To avoid any unrealistic fixing of individual price of popular pay channels, there should be a maximum retail price for pay channels and price should be determined on the basis of a channel’s carriage cost, observed the press statement.

For further details please contact:
Mani Lamba: 991044556
Manish Agarwal: 09829285925

CUTS' suggests three pronged strategy to salvage

July 12, 2006, New Delhi, Press Release

Suggesting a three pronged strategy to carry forward development thrust of the Doha Round of global trade talks, CUTS International has asserted that the burden of leadership remains on the developed nations who have more to give.

It is imperative for nations across the globe to ensure that the Doha Round is not declared sick so as to avoid another 9/11 and the onus for this lies on the developed nations who can actually deliver the Doha Round by being less mercantile and ensure that the poor are lifted out of their poverty through liberalization of trade and cutting out of farm subsidies in the rich world, which mainly benefit the fat corporates, Pradeep Mehta, Secretary General, CUTS International said today.

Pascal Lamy should cajole heads of governments of key countries to move and spell out their bottom lines to him. In the dog-eat-dog world of trade negotiations in Geneva, ministers could not have spelt out what their countries can do at the maximum because, often offers made by ministers/delegations can become binding with other parties then wanting more than what has been offered, Mr Mehta suggested.

The Director General should also address the issue of high protection which is given to farmers in developed countries and how it affects the farmers in the poor countries.

Alternately, since the fundamental issues of agriculture, NAMA and services cannot be settled, WTO Members should consider what can be agreed upon. The controversial issues can be left on the back burner and it is time to turn the Hong Kong declaration on its head and straighten out negotiations in other areas, such as WTO rules, TRIPs, trade and the environment, trade facilitation, aid for trade and the Integrated Framework, all of which are crucial for developing countries and have been unaddressed during negotiations, Mehta suggested.

Addressing the archaic customs procedures should be the centre piece of the final Doha deal. It is not important as to what is traded but how it is traded is important, Pradeep Mehta said.

For further details please contact:
Mani Lamba: 991044556

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