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June 15, 2008 / Mridul

US Makes Blatant Attack On India At WTO Doha Talks

After being attacked from all sides over its controversial biofuel subsidies, the US chose to divert the world’s attention by making baseless allegations against India. Describing India as being a roadblock in the progress of the Doha trade talks the US Under Secretary of Commerce Christopher Padilla said accused India of looking for ‘one-sided’ gains without making any compromises for promotion of free trade worldwide. The US accused India of trying to ‘sabotage’ by holding secret talks with other developing nations such as Brazil, China and South Africa. The Under Secretary said:

The Doha Round negotiations are not a donor’s conference. They require major economic powers like India to step up and take responsible leadership, rather than working behind the scenes for Doha’s demise.

While firing salvo at India the US representative forgot that his own country’s policies regarding biofuel subsidies are under probe and are drawing criticism. Canada and Brazil have complained about US’ massive subsidies program which, according to them, violates international trade rules. Demanding WTO intervention Canada and Brazil claimed

…… that in six of the past eight years the US has breached the $19.1bn it is allowed to spend on the most trade-distorting forms of subsidies, such as those linked to distributing goods.

Time and again White House has defended its biofuel policy while experts believe that diverting food crops for the production of biofuels is aggravating the worldwide food crisis. The US instead finds fault in the increased consumption levels of India’s middle class. But once again it forgot to do some introspection before putting the blame on India; a leading Indian daily The Times of India reported the findings of US Department of Agriculture which compared per capita food consumption in US and India.

According to the report:

Each Indian gets to eat about 178 kg of grain in a year, while a US citizen consumes 1,046 kg.

In per capita terms, US grain consumption is twice that of the European Union and thrice that of China. Grain consumption includes flour and by conversion to alcohol. In fact, per capita grain consumption has increased in the US — so actually the Americans are eating more. In 2003, US per capita grain consumption was 946 kg per year which increased to 1046 kg last year.

The Under secretary also blamed India for not practicing free trade and not opening its retail & other sectors to foreign investments. The under secretary should be reminded that several foreign retail companies including Wal-Mart have formed joint ventures with Indian firms with the goal of setting up country-wide chinas of retail stores. Indian government is also considering to allow foreign airlines to operate in India, it has increased FDI limits in cargo operations. The government allows about an overseas brand to hold 74% stake in a national telecom company – Vodafone’s takeover of Hutch-Essar is a prime example.

It is very unfortunate to see the US under secretary make such comments. His untrue and unjustifiable comments were blasted by India’s commerce minister Kamal Nath.

Indian investment in the United States in the last two years is more than the US investment in India in the last two years, and India has created more jobs in the US than the US has created in India.

…… American exports to India “went up by over 70 per cent last year.

Nath also took exception to the allegations that India was responsible with its export ban for the worldwide shortage of rice, saying that “we banned the exports of only the cheap quality rice. If you want to buy rice from India, buy the good quality one. Why do you want to buy the cheap quality one.”

He said, “Keep the cheap quality one for our 300 million people who earn less than $1 a day.”

So it wasn’t surprising that the American trade representatives had to do an ‘about turn‘ from their earlier comments. It would have been better had Mr. Padilla not made those irresponsible remarks. US Adminstration must work with an open mind if it wants to wants the Doha Round to be successful. Adamant behavior, as it has been showing, wouldn’t do the job.

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