US takes shine off gold exports
WASHINGTON, July 02 -- Hours after India's commerce minister Kamal Nath left Washington DC after resisting US pressure to toe its line on international trade, the Bush administration has terminated some preferential benefits to India and Brazil, signaling a tough new approach towards two countries regarded as rebels in a western effort to hew a new trade regime.
The US Trade Representative (USTR) announced that it is revoking duty-free status for gold jewellery and brass lamps from India, following a review of the Generalized System of Preferences programme mandated by Congress.
India shipped nearly $2 billion in gold jewellery and $20 million in brass lamps to the US in 2006 under the GSP programme. Although the USTR announcement also involved revoking GSP privileges to several other countries, India and Brazil (which got knocked on brake parts worth $242 million) are among the hardest hit.
The GSP programme was created in 1974 to provide duty-free treatment to nearly 5,000 products exported to the US from 131 beneficiary developing countries. GSP privileges are typically withdrawn when Washington feels products from beneficiary countries have exceeded statutory competitiveness limitations.
The USTR move followed several rounds of failed talks between Kamal Nath and US interlocutors aimed at breaking a deadlock that has stalled progress on the Doha Round. Administration officials, including Secretary of State Condoleezza Rice and Nath's counterpart Susan Schwab have bitterly criticised India for being the spoiler.
But Kamal Nath, a suave Doon Schooler entrusted with safeguarding the livelihood of 800 million Indians who subsist on agriculture, has stood his ground. In a press conference at the Indian Embassy before he left for India, Nath said, "Indian agriculture is subsistence, it's not commerce. You can negotiate commerce, but you cannot negotiate subsistence."
At the heart of dispute is the US-EU insistence that India and other poor nations whittle down high tariffs. Nath and his developing world counterparts want the west to first reduce subsidies to their farm sector that makes western produce cheap, and whose import (sans tariff) will decimate the agricultural sector in poor countries. A country like India, Nath said, is "batting for protection of livelihood."
Nath's arguments have had little impact in the US, where his counterpart, USTR Susan Schwab, who the Indian commerce minister has met seven times in the last fortnight, launched a withering attack on India, accusing it of "misusing its newfound clout."
"Perhaps India and other major trading countries are still assessing their new responsibilities. It's my earnest hope that they come to terms with the reality that the benefits of accepting this responsibility will dwarf the political and economic challenges of doing so," Schwab said in Nath's presence at a meeting of the US-India Business Council earlier this week.
Secretary Rice followed her up by remarking that "it would be a tragedy and a true shame if we did not complete this historic (Doha) agreement" implicitly blaming India for the deadlock.With such rebuke ringing in his ears, Nath still presented a calm face, promising that India and the US would eventually find convergence in their positions. He also cited figures to show that bilateral trade between the two countries was healthy and poised for greater growth.
But for now though, the only concession New Delhi gave Washington was a basket of mangoes that Prime Minister Singh's media advisor Sanjaya Baru presented to Secretary Rice. And that too a few hours before the US took the shine off Indias gold exports.
Last Updated: Mon, 02 Jul 2007 16:57:00 |
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