India defends WTO stance, says food security non-negotiable.

New Delhi: Developing countries such as India must have the freedom to use food reserves to feed their poor without the threat of violating any international obligations because this is their sovereign right, trade minister Nirmala Sitharaman said in a statement on India’s stand in the World Trade Organization (WTO) in the Lok Sabha.

India scuttled the Trade Facilitation Agreement (TFA) which is part of the Bali package at the WTO because it was not satisfied with the progress on finding a permanent solution to the issue of allowing it higher public stockholding of foodgrains.

In a strongly worded statement, Sitharaman said developed countries have a “single-minded mercantilist focus” on market access issues, while they have no time to engage to find a permanent solution to the food security issue, which is of key concern to developing countries.

“It is regrettable indeed that today the WTO is unable to agree even to fast track negotiations on an issue of such importance to millions of subsistence farmers across the developing world, while the rich world can continue to subsidize their farmers unabatedly,” Sitharaman said.

Last ditch attempts to meet the 31 July deadline to make the TFA a WTO rule failed as India did not support the move. All agreements at the multilateral institution are taken on the basis of consensus which means a single dissenting country can scuttle a deal.

The TFA is meant to simplify customs procedures, facilitate the speedy release of goods from ports and cut transaction costs. Some analysts believe that it would have been in India’s interests to sign the deal because it would have helped the cause of India’s exports. India currently has a negligible 1.7% stake of the global export market.

At the heart of the problem is a WTO rule that caps subsidies to farmers in developing countries at 10% of the total value of agricultural production, based on 1986-88 prices. Developing countries complain that the base year is outdated and that they need to be given leeway to stock enough grains for the food security of millions of their poor.

Developed countries have complained that India is going back on its promise made at Bali last December where it was agreed that the TFA will be made a WTO rule by 31 July, while a permanent solution to the food security issue will be found only by 2017. India has maintained that different timelines for various elements of the Bali package is against the WTO rules of a single undertaking where everything need to be implemented simultaneously. India believes progress on TFA has been quicker than that on food security.

“In contrast to their efforts on trade facilitation in the WTO, some developed countries have been reluctant to engage on other issues. Seeing the resistance to taking forward the other decisions, the apprehension of developing countries was that once the process of bringing the Trade Facilitation Agreement into force was completed, other issues would be ignored, including the important issue of a permanent solution on subsidies on account of public stockholding for food security purposes,” Sitharaman said in the statement.

India, therefore, took the stand that till there is an assurance of commitment to find a permanent solution on public stockholding and on all other Bali deliverables, including those for the Least Developed Countries (LDCs), it would be difficult to join the consensus on the Protocol of Amendment for the Trade Facilitation Agreement, Sitharaman said.

Ajay Shriram, president of the industry lobby group Confederation of Indian Industry, said in a statement that the agreement on trade facilitation must be taken to its logical conclusion along with commensurate progress on the other two issues of Bali Ministerial decisions. “A great amount of effort have gone into clinching a balanced Bali deal. Hence it must not be wasted and all efforts must be made to use Bali Ministerial outcomes as a springboard to conclude the Doha round, which is into its 13th year of negotiations,” he added.

Australian G-20 sherpa Heather Smith said at a briefing that the failure to meet the deadline for the TFA would have an impact on the confidence of member countries on the strength of the WTO as a global institution to deliver outcomes.

Sitharaman said developing countries are finding themselves hamstrung by the existing rules in running their food stockholding and domestic food aid programmes. “The developed world too had market price support programmes and was able to move away from such support—though not fully even now—because of their deep pockets. This is not possible for developing countries. It is important for developing countries to be able to guarantee some minimum returns to their poor farmers so that they are able to produce enough for themselves and for domestic food security,” she added.

India has indicated that it is ready to engage with member countries of the WTO after it opens on 1 September after the summer break. Sitharaman said she is confident that India would be able to persuade the WTO membership to appreciate the sensitivities of India and other developing countries and see their way to taking this issue forward in a positive spirit. “This would be a major contribution by this institution towards meeting the global challenge of food insecurity and would convey a strong message that the WTO is genuinely committed to the cause of development,” she added.

Biswajit Dhar, professor of international trade at Jawaharlal Nehru University, said India should try and form a broad coalition of developing and least developed countries at the WTO. “The Bali package also promised measures for the cotton producing countries as well for the LDCs. Nothing is happening on those fronts as well. So we should coordinate with all these countries and bring them under one coalition,” he added.

Senior Congress leader and former trade minister Anand Sharma said, “What India should have done was to give a work programme for accelerated movement on a permanent solution on public stockholding not linking to TFA”.

Source : livemint.com