On September 14, 2003, when the WTO talks in Cancun broke down on account of differences between the member countries on various traderelated issues, the January 2005 deadline, for the Doha round of talks to conclude, appeared far-flung. Both the developed and the developing countries were losing faith in the talks and hopes that WTO would act as a forum for the developing global trade policy started to fade. In the wake of the failure of Cancun, a lot depended on Geneva for taking the Doha Development Agenda forward and for the future of the WTO talks. So, on July 31, 2004 when an agreement was reached at Geneva, it was a success in terms of breaking the deadlock. All the 147 members agreed on broad principles, which would govern the trade negotiations, but the details of the deal are yet to be finalized.

The Geneva agreement is an interim accord leading to further negotiations under the Doha trade round of talks. The agreement revolves around five key areas, namely agriculture, industrial products, development issues, trade facilitation and services. On the agricultural front, rich countries have agreed to reduce agricultural subsidies for their farmers, which would make the agricultural products of poor countries more competitive. The developed countries will also have to do away with direct and indirect subsidies provided to their exporters. While no time frame is set, the agreement requires the developed countries to reduce their domestic subsidies by 20% in the first year.

The reductions are to take place, gradually, through tiered formulae, wherein the countries providing higher levels of support will be asked for larger reductions. The developing nations, on the other hand, have agreed to reduce import tariffs. The tariff cuts will follow a non-linear formula, wherein the higher the tariffs, the deeper the cuts. Corresponding to the developed countries’ right of selecting some products as ‘sensitive’, the developing countries have also been given the right to choose ‘special’ products. As per the WTO draft, developing country members will have flexibility to designate an appropriate number of products as ‘special’ products, based on criteria such as food security, livelihood security and rural development needs.