WTO challenge India and China team up

India and China will challenge the west's control over global trade rules with a united front at the World Trade Organisation.

The alliance was struck last week during their first summit meeting for a decade and could spell trouble for Europe's farmers as India has said cutting western agriculture subsidies will be top of their agenda.

Arun Jaitley, the Indian minister for commerce and industry said on a visit to London yesterday: "We want to see the reduction and eventual elimination of agricultural subsidies ... as the impact distorts the market and depresses prices in developing countries."

It also endangers the livelihood of poor farmers (such as the one above in Alwar, India), he added .

Mr Jaitley expressed disappointment that the deal Europe struck last week on the future of the Common Agriculture Policy will not reduce spending on farm subsidies. "Unless there are significant quantum reductions, it does not go far enough," he said.

India and China will also work to oppose Europe's call for new negotiations covering foreign investment, competition, customs rules and government procurement. India vetoed discussions on these issues at the launch of the new round of trade talks 18 months ago in Doha.

Mr Jaitley indicated that while India was prepared to consider the issues one by one, it remains opposed to talks on investment.

"Unless the parameters of the investment issue are clear, we are reluctant to go into negotiations," he said. "This is also I understand the Chinese position."

Mr Jaitley warned that adding new issues to the WTO's overburdened agenda could prevent resolution of more urgent issues such as the stalemate over rules allowing poor countries access to copycat drugs.