Doha round must not ignore poor countries: Jaitley

Talks to tear down barriers to global trade will go nowhere unless rich countries get serious about meeting the needs of developing nations, Commerce and Industry Minister Arun Jaitley said on Monday.

In an interview with Reuters, Jaitley said ensuring access to low-cost drugs, fully implementing earlier trade agreements and granting special treatment to poorer countries were all issues that had to be resolved if the World Trade Organisation's Doha round of trade negotiations were to make progress.

"For the success of the round, the concerns of the developing countries have to be addressed," Jaitley said.

India was a vocal champion of developing countries when the round was launched in Doha, Qatar, in November 2001, and its stance will be critical in the run-up to a ministerial progress review in Cancun in September.

"If there are no solutions to these issues, then the road to Cancun becomes a little bumpy," Jaitley said.

The round, which is meant to conclude by January 1, 2005, is already going nowhere fast.

Negotiators from the WTO's 146 member states have missed two important deadlines -- on when to override patent protection for drugs and the principles for freeing up farm trade. Diplomats fear a May 31 cut-off date for agreeing a framework for cutting tariffs on industrial goods will suffer the same fate.

As the round is negotiated as a package, blockage in one area will make it much harder to reach an overall deal.

At the heart of the negotiations is agriculture. Poorer countries complain bitterly that Europe and the United States place unfair obstacles in the way of their farm produce and, by giving massive subsidies in various forms to their farmers, undercut them in other major markets.

India, though, is staunchly opposed to reducing its own barriers to agricultural imports. With 650 million people living on the land, Jaitley said the question of permitting easier access

to India's market would not arise as long as rich countries refused to dismantle their farm subsidies.

"We cannot afford, neither economically nor socially and certainly not politically, to allow these people to compete with highly subsidised developed countries," he said.

India is slowly but surely lowering the protective barriers guarding its economy. It aims to cut its tariffs, which are among the highest in the world, to the South-east Asian average within three years and to increase its puny share of world trade to one per cent from 0.67 per cent by 2007.

But Jaitley, who took office in January, said there were limits to the pace of liberalisation; small-scale industries that are sheltered from competition are big employers, and customs duties make up about a quarter of government revenues, he said.

To boost exports, the government hopes other industries will emulate the success of India's computer software sector, whose overseas sales jumped 29 per cent in the year ended in March to $7.5 billion, or 16 per cent of total exports.

The fastest-growing segment is business process outsourcing. A lengthening list of western firms anxious to cut costs is tapping India's deep pool of well-educated, fluent English speakers for everything from telephone inquiries, processing loan applications and transcribing medical records.

But India's success in these "IT-enabled" sectors is triggering a political backlash from trade unions in Britain and lawmakers in the United States. Media reports says several US states, led by New Jersey, are considering legislation banning the offshore outsourcing of public-sector contracts.

Jaitley said throwing up non-tariff barriers sent the wrong signal to the trade negotiators of countries striving to grow out of poverty.

"If a developing country has built up a strength in one area and is denied market access, it might be difficult for it to accept market access in other areas," he said.