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Business News/ Politics / Policy/  How the WTO deal fell apart
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How the WTO deal fell apart

A look at the sequence of events that led to the collapse of the WTO deal

After holding wide-ranging discussions with various coordinators of the WTO groups, director general Roberto Azevedo on 28 July proposed a month-wise specific work programme on food security in his personal capacity to India. Photo: AFPPremium
After holding wide-ranging discussions with various coordinators of the WTO groups, director general Roberto Azevedo on 28 July proposed a month-wise specific work programme on food security in his personal capacity to India. Photo: AFP

New Delhi: On 25 July, India’s ambassador at WTO Anjali Prasad put out India’s final stand before the WTO’s general council meeting, holding that the Bali outcomes were negotiated as a package and must be concluded as such. She sought a postponement of the 31 July deadline for implementation of the TFA till 31 December, so members could find a permanent solution to the food security issue.

After holding wide-ranging discussions with various coordinators of the WTO groups, director general Roberto Azevedo on 28 July proposed a month-wise specific work programme on food security in his personal capacity to India. While India appreciated the gesture, it maintained that it does not give India a permanent solution to food security and is only concerned about the “process" not “substance".

“We decided to engage in a more constructive and problem-solving manner," a commerce ministry official said requesting anonymity.

After many notes were exchanged and options discussed, finally on 30 July, India proposed two options: First, that the Article 18.4 of the Agreement on Agriculture should be explained or the 1986-88 price reference for calculating subsidies should be updated. Article 18.4 talks about inflation adjustment to domestic price support given by countries to their farmers.

Second, the peace clause under which India had a four-year relief during which no country can challenge it at the WTO if it violates the food subsidy limits should be extended till a permanent solution is found. For this, India proposed a small change in the language of the Bali declaration which would have turned the agreement in India’s favour. At present, while India has the four-year leeway, it has been left ambiguous as to what will happen if no permanent solution is found within that period of time.

The director general held rounds of meetings with various groups. Finally, Azevedo proposed that India should be satisfied with a favourable chair’s summary (the observations of the chair after consultations with member countries).

But India insisted on a general council decision on the matter since a chair’s summary is not binding. This, of course, was not acceptable to developed countries, which is why Azevedo declared that members came significantly close to a deal “but not quite there".

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Published: 01 Aug 2014, 10:25 PM IST
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