India opposes new US proposals on food stocks
PremiumUS suggests examining food security policies of WTO members to arrive at 'best practices' for public stockholding
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Geneva: Recent US proposals aimed at finding a permanent solution to the tussle over public stockholding for food security are inconsistent with what members of the World Trade Organization (WTO) are required to accomplish as part of the so-called Bali mandate, Indian officials said.
At an informal meeting of the Doha agriculture negotiating body at the WTO on Friday, the US presented a restricted document called Proposed Elements for Discussion on Public Stockholding for Food Security. It calls for a review of “existing food security policies, in particular public stockholding for food security programmes".
The US wants members to consider the “efficacy" of public stockholding programmes as food security tools and their effects on trade, including any unintended consequences that may distort trade or adversely impact the food security of other members. Based on the review of the public distribution policies, the US wants members to agree on a “set of best practices for public stockholding policies". Subsequently, a permanent solution will be finalized, the US has argued, in its proposals, reviewed by Mint.
Responding to the US proposals, India maintained that the Bali mandate requires members to finalize “a permanent solution for food security purposes but not on food security policies [of WTO member countries]."
The US proposal to discuss food security policies of other countries was already rejected by trade ministers when they framed the Bali mandate on what needs to be done to find a permanent solution, an Indian official has argued, according to people familiar with the exchange between the US and India at the meeting.
Several nations, such as China, Indonesia and the Philippines, supported India, saying that the Bali mandate requires members to discuss the “conditions" for a permanent solution but not the food security policies of members. “This is a classic tactic of stonewalling by the US to ensure that there is no permanent solution by the end of this year," said a South American agriculture negotiator, requesting anonymity.
The Bali mandate, which was further modified last year after India and the US had reached an understanding, calls on WTO members to negotiate “a permanent solution on the issue of public stockholding for food security purposes" by 31 December. Until conditions for a permanent solution are agreed upon and adopted, members shall not raise trade disputes against nations currently implementing public distribution system (PDS) programmes, according to the revised mandate.
The G-33 coalition led by Indonesia, and which includes China, India, the Philippines and 40 other developing and poor nations, has proposed three alternatives for a permanent solution.
First, adding a new paragraph to the so-called government service programmes in the green box disciplines of the WTO’s agreement on agriculture, which are exempted from any subsidy reduction commitments. Second, modifying the existing rules to ensure that the acquisition of food stocks by developing countries to support low-income, resource-poor producers is not required to be calculated under the method used for calculating trade-distorting domestic subsidies. And third, modifying and amending the rules to calculate subsidies based on the so-called external reference period of 1986-88, which was decided during the previous Uruguay round (UR) of trade talks.
The Doha talks were launched in 2001 to reform the rules in the WTO’s agriculture agreement negotiated during the UR. The UR rules for agriculture were largely decided by the US and the European Union (EU).
Public stockholding programmes for food security were included in the Doha negotiating mandate for rectifying the UR disciplines. The revised draft 2008 modalities on public stockholding prepared by the former chair for Doha agriculture negotiations, Crawford Falconer of New Zealand, had clearly stipulated “that there is no requirement for difference between the acquisition price and the external reference price to be accounted for in the AMS [aggregate measurement of support or trade-distorting subsidies]."
The EU ruled last week that it will not agree to including PDS programmes in the green box, or to the other alternatives proposed by the G-33, on the grounds that they are not acceptable. The EU wants the G-33 to come with new proposals, but is not willing to discuss what the group had proposed last year. The latest stand-off needs urgent resolution. “The food security issue has come to a flashpoint and needs urgent resolution," the South American official argued.
In an attempt to find a solution on a priority basis, the G-33 has called on the chair for Doha agriculture negotiations, ambassador John Adank, to nominate a “Friend of the Chair" to facilitate negotiations for formulating a “balanced" permanent solution for public stockholding programmes for food security.
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