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Poll vault: Commodity lobbies reduced US' negotiating space

The US’ negotiating space in the World Trade Organisation (WTO) talks has been considerably reduced by its strong domestic commodity lobbies which fund the ruling party’s election campaign.

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Last Updated: Jul 26, 2006, 02.38 AM IST|Original: Jul 26, 2006, 02.38 AM IST
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NEW DELHI: The US’ negotiating space in the World Trade Organisation (WTO) talks has been considerably reduced by its strong domestic commodity lobbies which fund the ruling party’s election campaign.

The producers of five major commodities — wheat, cotton, soya, corn and sugarcane — which corner almost 80% of the local farm sops, are opposing any move which could cut the dole they get.

Speaking to ET, official sources said it would be difficult for the US government to go against the wishes of the commodity lobbyists as they give as much as $900bn in the election process. There is a general feeling that the WTO talks collapsed in Geneva earlier this week primarily due to the US’ refusal to bring about substantial reduction in its trade distorting domestic subsidies.

The US refused to pay heed to the G-20 demand backed by the EU that the ceiling on domestic subsidies should be brought down by 75%. It, instead, stuck to its original offer of reducing the ceiling by 53%.

The US offer is unacceptable to the G-20 as it would not cut into its actual subsidy levels of $19bn. Since the US-bound level of subsidies is much higher at $48bn, a 53% cut would enable it to increase its applied levels to $22bn. Officials, however, said that if the US tries hard enough, it could get around the domestic lobbyists.

“The US has to decide whether it is more important to keep a handful of rich farmers happy or get the Doha round going. Things will fall in place after that,” the official said.

In the past, the US had shown grit by getting around its pharmaceutical lobby by giving its nod to the Trips & public health agreement. The US pharma lobby was opposing the agreement as it allows poor countries with no domestic production capacity to source patented medicines from non-patent holding countries during emergencies and other calamities.
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