Geneva: India has warned that a meeting of trade ministers in Buenos Aires in December will run into “serious consequences"—even “jeopardizing" the outcomes—if the European Union (EU), Brazil and other countries insist on linking New Delhi’s core demand for safeguarding public stockholding programs for food security with a quid pro quo cut in agricultural subsidies, people familiar with the development said.
“Any efforts to foster a linkage that a PSH (public stockholding) outcome is linked to agricultural domestic support" will “have serious consequences including jeopardizing...outcomes," India’s trade envoy J.S. Deepak told his counterparts at a meeting of the heads of delegations on Tuesday, according to a person who asked not to be named.
The World Trade Organisation’s (WTO) 11th ministerial meeting in Buenos Aires is scheduled to take place on 10-13 December.
Developing countries led by India and others want world trade rules to ensure that they will not be challenged legally if they breach a country’s agreed limits for trade-distorting domestic support, such as minimum support prices for crops.
The European Union (EU), Brazil and others have proposed that the PSH must be finalized along with their proposal for reducing the overall trade-distorting farm subsidies on a percentage basis.
Effectively, the EU and its allies are asking India and other 47 members of the Group of 33 countries, including China, to make a ‘payment’ for the mandated permanent solution for public stockholding programs by agreeing to their proposal on domestic support.
In trade negotiations, a payment implies that a country must enter into a trade-off for an outcome it is seeking by agreeing to a demand from the other.
“Let me emphasize that the mandate on this (i.e. permanent solution for PSH) is absolutely clear, there is no linkage and the issues have to be kept on separate tracks," Deepak said, according to another person from Africa.
Without naming industrialized countries such as the US, EU, Japan, Norway and Switzerland among others, Deepak said the WTO’s Agreement on Agriculture “is skewed in favour of a few developed members and provides considerable space and flexibility for them to provide (farm) subsidies and further, to concentrate (farm) subsidies on a few products."
India and China issued a joint proposal for eliminating tens of billions of dollars of what are called most trade-distorting farm subsidies or Aggregate Measurement of Support in the industrialized countries—a step they say can be prelude to a credible reform of the global trade in farm products.
The joint proposal by India and China was supported by more than 100 countries at Tuesday’s meeting.
“Proposals that only expect developing countries to share the burden but also reduce the S&D element are not acceptable to us," Deepak cautioned. S&D is short for special and differential treatment, which give developing countries certain special rights.
Over the last several months, major industrialized countries such as the US and the EU have indicated the need to curtail special and differential flexibility that are aimed at helping poor farmers in developing countries through subsidies in Article 6.2 of the WTO’s Agreement on Agriculture.
The coordinator for the African Group of more than 50 countries, François Xavier Ngarambe of Rwanda, said at Tuesday’s meeting that the African Group supports the elimination of “all historical imbalances," including the elimination of the most trade distorting farm subsidies by developed countries—an Indian and Chinese demand.
Like India’s Deepak, South Africa’s trade envoy Xavier Carim, who is the chair of the WTO’s General Council, also warned that “while the complex technical questions will not easily be resolved... the most serious risk to an outcome on public stockholding (at Buenos Aires) is the linkage being made to the one proposal on domestic support (by the European Union and Brazil)."
“We need to be frank here," said Carim, emphasizing that the proposal by the EU and Brazil “will not achieve consensus because it does not establish a fair or equitable basis for future work." He warned that “the linkage thus risks derailing possible progress on public stockholding, with possible knock-on consequences."
India, along with a large majority of countries also issued several markers for the Buenos Aires meeting on controversial issues that could negatively impact developing countries, including attempts to launch negotiations for rules in electronic commerce, investment facilitation, and disciplines for small and medium enterprises.
On e-commerce, India said, “We do not support setting up of a new horizontal Working Group (as proposed by the EU, Japan, Russia, and several other industrialized as well as some developing countries) which could result in a top-down approach."
New Delhi said it will support a two-year moratorium for not collecting customs duties on electronically traded goods and services “subject to a similar renewal of moratorium on TRIPS (trade-related intellectual properties) non-violation and situation compliants (by the US and Switzerland)."
India expressed sharp concern over the “continued impasse" created by the US in blocking the selection process for filling three vacancies at the WTO’s highest court for resolving global trade disputes.
Without naming the US, India said “any systemic issue raised by any member could be dealt with separately and there should be no linkage with the selection process of the appellate body members which can affect the effectiveness, autonomy and impartiality of the dispute settlement mechanism, a key pillar of the WTO."