Home / Opinion / Confusion galore on India and WTO

While food security is a matter of national sovereignty (Mint Edit, 22 July), let us not confuse it with trade negotiations, as many are indulging in. Secondly, the World Trade Organization (WTO) issue is on production subsidies and not consumption subsidies, so it does not affect our poor consumers. India’s principled stand seeking parallel progress on trade facilitation and food security agreements, including development issues, at the WTO is a right step. Otherwise, one will move fast and the others will lag behind.

The history of trade negotiations shows rich countries push their agenda and indulge in dragging issues of poor countries to tire them out by just talk and talk. In the run up to the WTO ministerial at Bali in December, the three issues were intertwined. At Bali, India ensured that public stockholding of food does not lose its spot in the way forward for the accord. It was adopted as one of the priority items of the long-drawn Doha Round. Trade facilitation (TF) and LDC (least developed country) concerns were the two others.

TF was one of the four Singapore issues agreed to be negotiated at Doha in 2001, others being investment, competition and transparency in government procurement, which were dropped at Cancun in 2003. However, TF remained on the negotiating block. Following the Hong Kong WTO ministerial meeting in December 2005, it was back on the negotiating track. In so far as India is concerned, it was ready to negotiate competition and government procurement, but that never happened. More importantly, in all the four areas, India has been voluntarily liberalising and strengthening the regulatory regimes, knowing what is good for freeing the economy.

At Doha, three declarations were adopted. The main text to liberalise trade with the enticing label of development, second to clean up the problems with the WTO agreements and third, an agreement to waive obligations under TRIPs (trade-related aspects of intellectual property rights) on grounds of public health. Over time, the main Doha accord on liberalising trade moved on fast speed but the one on implementation problems just did not move.

The US even suggested that we can have conceptual discussions on implementation issues, but no resolution at all. This is one example of differential approaches by rich countries to agreed texts in trade negotiations, so how can anyone blame India for holding up the TF protocol, not accord, at Geneva? However, the Doha Round has been bandied about for more than 12 years and rich countries seem to have lost interest in it, while the poor are still searching for the promise of development outcomes.

Due to the logjam in the Doha Round, the US is pursuing preferential trade agreements such as Trans-Pacific Partnership with many countries in Asia and the Pacific but without China or India, and a Trans-Atlantic Trade and Investment Partnership with the European Union. Furthermore, they are also seeking a plurilateral agreement on services at the WTO, again without China or India.

Given this phenomenon, which would weaken the multilateral trading system, it is in India’s interest to pursue the conclusion of the Doha Round. This was also stated in the Bali ministerial declaration, thus the field is wide open. The major problem with the Doha Round is the rich countries’ farm subsidies, which has always been the most contentious of all issues. Every time, the rich find newer ways to deflect attention to address this, and now they are attacking our regime, which is to uphold the rights of poor farmers, and not corporate farmers.

On the other hand, India and 40-odd developing countries, fearing a challenge to their issues relating to subsidies for producing staple food items (wheat and rice), made it a condition for the Bali accord. The limit for such production subsidies agreed to in the WTO Agreement on Agriculture needs correction because international prices have gone up hugely, as it was based on international prices of the late 1980s.

Since domestic prices offered to our farmers have also gone up as a result of increasing international prices, the difference between our current domestic price and previous price on the basis of which the farm agreement calculates aggregate measurement of support has also grown over time, threatening to breach the subsidy limit which is allowed to countries like ours. This formula has to be reframed.

Knowing very well the tricks of the rich countries to talk and talk, India pushed for a permanent solution to be found by the WTO ministerial in 2017 rather than leave it unclear. Till the time a permanent solution is found, India and other such WTO members will not be impugned at the WTO on this matter. It is possible to find this solution. In Bali, India agreed to this peace clause as per an assurance by the rich countries that there is, and will be, a balance among all three pillars of the Bali accord.

Therefore, India has taken this position on pushing forward the protocol on trade facilitation beyond end July unless there is some demonstrated traction on food security. Many a deadlines have been missed in international trade negotiations, so the heavens will not fall.

Pradeep S. Mehta is secretary general, CUTS International and member of the WTO’s High Level Panel on The Future of Trade (2013).

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