Home >News >World >No WTO deal is better than a bad deal, says Anand Sharma
Activist holds a banner during a protest against the World Trade Organization (WTO) in Bali, Indonesia on Thursday. India’s stand has posed the risk that the ministerial meeting in Bali would end in failure. Photo: Achmad Ibrahim/AP
Activist holds a banner during a protest against the World Trade Organization (WTO) in Bali, Indonesia on Thursday. India’s stand has posed the risk that the ministerial meeting in Bali would end in failure. Photo: Achmad Ibrahim/AP

No WTO deal is better than a bad deal, says Anand Sharma

Anand Sharma asks whether developing countries should keep on compromising when right to food security is at stake

New Delhi: Refusing to back down from his stance that food security is non-negotiable at the World Trade Organization’s (WTO) ministerial meeting in Bali, Indonesia, trade minister Anand Sharma said on Thursday that India would prefer to have no deal than a bad one.

But India still wants a positive outcome in Bali, and a deal is possible if a compromise is reached, he said, according to the audio transcript of a press conference addressed by the minister in the Indonesian city and posted on the WTO website.

“We have not come here to collapse any meeting," Sharma said. “India is also committed to a balanced and fair outcome. There have been past meetings where no result was there. It is better to have no agreement than to have a bad agreement."

India’s stand has posed the risk that the ministerial meeting in Bali would end in failure, further eroding the credibility of an institution under which no multilateral deal has been concluded since its formation in 1995.

Sharma said at the plenary session of the meeting, attended by delegates from 159 WTO members, on Wednesday that the current offer on food security and trade facilitation—the latter aims to harmonize and streamline global customs rules—was not acceptable to India.

Both are key building blocks in attempts to lay down the rules of world trade that have been deadlocked since the launch of the Doha round of multilateral trade talks in 2001.

The present draft, prepared in Geneva, provides developing countries temporary relief of up to four years, known as a “peace clause", during which they cannot be challenged under the agreement on agriculture if they cross the permissible food subsidy ceilings.

But it does not provide such a guarantee under the agreement on subsidies and countervailing duties, which is supposed to regulate the actions countries can take to counter the effects of subsidies.

India wants a peace clause until a permanent solution is explored which developed countries are not inclined to agree to. But Sharma said the four-year clause was unacceptable.

“Should it be for the developing and poor countries to keep on compromising and show flexibility when it is their right to food security which is at stake?" he queried.

India initially showed flexibility on the food security pact and seemed to have agreed to the four-year peace clause. However, given the political sensitivity of the food security issue at home, particularly ahead of the general election due by May, it has since hardened its position.

India is concerned that it may be found in breach of a pact on public stockholding of food grains under WTO after it enacted the Food Security Act, legalizing the right to food for two-thirds of its population, earlier this year.

Under the WTO Agreement on Agriculture, which has not yet been agreed upon, developing countries have to keep their food subsidies under 10% of the value of the total food grains produced.

Though WTO does not monitor the food subsidy that the Indian government provides to its consumers, the breach could happen because India may be forced to procure more grains to meet demand and in the process may have to keep increasing the minimum support price for such procurement.

Sharma hinted that there could be a deal, provided eight out of the 10 texts proposed in the draft agreement are adopted, and trade facilitation and public stockholding of food grains are excluded.

“How can you say that heavens will fall if out of 10 texts proposed, eight are adopted and two have to be negotiated so that there is correct balance? I don’t know why this gloomy scenario is being painted that only if I sign away, as a country, our principles and the right to food security of the poor people, then only the WTO will be saved," he said.

“Strengthening of WTO is a shared responsibility of both the developed and developing countries. Those who are speaking up for the poor and the hungry people cannot be blamed," he added.

Explaining India’s compulsions in stressing a fairer deal in agriculture, Sharma cited the Food Security Act and said the government was legally bound to ensure that the prescribed quantity of food is made available to the targeted beneficiaries.

“We cannot possibly be expected to negotiate something which is in direct conflict with our food security," he said.

“We have not come here as petitioner to beg for a peace clause. Is it binding on us to accept 1986-88 prices and (make) ourselves vulnerable to disputes and calculations? The answer is a firm no. This is a fundamental issue, we will never compromise," Sharma said.

Pradeep S. Mehta, secretary-general of CUTS International, a non-government organization, and a member of WTO’s high-level panel on the future of trade, said in a statement that he is still optimistic about a positive outcome at the Bali ministerial meeting and asserted that the rules made in WTO are far more fair and equitable for developing countries.

“The deal could recognise the need to reformulate the subsidy equation within and not later than the agreed period of four years (peace clause), as the WTO farm agreement has been pegged on 1986 commodity prices, while today’s prices are much higher," he added.

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