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Commerce minister Nirmala Sitharaman delivers her statement at the plenary session of WTO’s 10th ministerial conference in Nairobi on Wednesday. Photo: PTI
Commerce minister Nirmala Sitharaman delivers her statement at the plenary session of WTO’s 10th ministerial conference in Nairobi on Wednesday. Photo: PTI

Developing and developed countries in deadlock at WTO

Developing countries, led by India, pushed back at attempts at WTO to smother their concerns on food security and SSMs

Nairobi: Developing countries, led by India, pushed back at attempts at the World Trade Organization (WTO) to smother their central concerns on ensuring food security and provision of special safeguards to protect domestic farmers from a surge in imports.

Consequently, the battle lines between the two blocks of countries have been drawn. It is not clear whether this may prove to be a deal-breaker at the WTO’s 10th ministerial conference—meetings scheduled later in the day may untangle the situation, with only a day to go for the end of the conference.

The draft ministerial decisions circulated by the facilitator Joshua Setipa, Lesotho’s trade minister, brushed aside the concerns of developing countries on both public stockholding programmes to manage food security and a special safeguard mechanism (SSM).

“I have objected to draft texts almost on each line in special safeguard mechanism, public stockholding programmes for food security and the export competition pillar," commerce minister Nirmala Sitharaman told Mint.

The draft ministerial decision on SSM says “work on a special safeguard mechanism for developing countries shall be pursued taking account of proposals by members and in the broader context of agricultural market access".

Effectively, the text has linked outcome on SSM with all issues concerning tariff cuts, sensitive products, special products, tariff quotas and a host of other issues such as market access to developed countries.

After holding a detailed meeting with the facilitator Setipa and the chair for Doha agriculture negotiations ambassador Vangelis Vitalis, who drafted the texts after their meetings with their trade ministers in different configurations, Sitharaman said they failed to reflect the proposals placed by members until now. She said the texts on SSM, public stockholding programmes for food security, and the export competition are imbalanced and failed to accurately reflect the proposals tabled by the G-33 members until now. According to her, there is no linkage between SSM and market access pillar negotiations as set out in the 2005 Hong Kong Ministerial Declaration.

Sitharaman said the text on export competition, which includes export subsidies, export credits, food aid and state trading enterprises, is inconsistent with the Doha ministerial decisions, including the 2008 revised draft modalities.

Several trade ministers of the G-33 farm coalition have opposed the draft text in a meeting that took place at noon. India, China, Indonesia, the Philippines, Kenya and 42 other countries of the G-33 farm coalition have consistently demanded over the past two years a permanent solution on public stockholding programmes and a simple and effective SSM at the Nairobi meeting that began on 15 December.

The coalition had circulated modified proposals on these two issues, including a proposal on special safeguards that is currently availed of by industrialized countries.

Sitharaman said SSM is a prerequisite for developing countries as part of the Nairobi outcome that also includes a substantive agreement for export competition and best endeavour results on cotton. She said the priorities for India are to get an outcome on SSM and ensure that the Doha Development Agenda negotiations are re-affirmed at the Nairobi meeting.

Sitaraman said that in her meeting with WTO director-general Roberto Azevedo at Nairobi, she emphasized the importance of SSM for India because the current bound tariffs on some sensitive agricultural products for Indian farmers will not provide cushion against sustained import surges.

She said the G-33 “has strongly argued the case for an effective special safeguard mechanism for developing countries and for changing the rules relating to public stockholding for food security purposes".

“We are disappointed at the cavalier manner in which these issues are being pushed into the future," the minister argued in her plenary intervention. “It is regrettable that longstanding issues of interest to a large number of developing countries are being put aside for the future and new issues of recent vintage are being taken up with unusual enthusiasm," she lamented.

Against this backdrop, the draft ministerial decision issued on early Thursday morning has almost vindicated India’s concerns on both public stockholding programmes for food security and SSM. The draft ministerial decision on SSM says “work on a special safeguard mechanism for developing countries shall be pursued taking account of proposals by members and in the broader context of agricultural market access."

The draft text of ministerial decisions doesn’t say whether an outcome on SSM will be linked to the negotiations on market access pillar of Doha Development Agenda negotiations or if a fresh round of negotiations has to be launched with new approaches as demanded by the US and other industrialized countries.

The US trade representative ambassador Michael Froman told the tenth ministerial plenary meeting on Thursday that the US is willing to negotiate all the outstanding issues of the Doha agenda but with new approaches which he did not specify.

On public stockholding programmes for food security, the draft ministerial decision said, “The interim mechanism as set out in the Bali ministerial decision on public stockholding for food security purposes, and the general council decision of 28 November 2014, shall remain in force until a permanent solution on the issue of public stockholding for food security purposes is agreed and adopted".

The decision added that “the negotiations on a permanent solution on the issue of public stockholding for food security purposes shall continue to be pursued as a priority in the committee on agriculture for special sessions, in dedicated sessions and in an accelerated time-frame".

On the other hand, the Nairobi draft ministerial decision provides an indefinite time frame as against the 2017 deadline as set out in the Bali interim decision.

If accepted, there will be no immediate solution to the issue of permanent solution for public stockholding programmes for food security, several developing country trade ministers claimed in Nairobi.

The ministers are expected to state their positions on the draft ministerial decisions at a meeting on Thursday evening.

In contrast, the outcomes on elimination of export subsidies by 2020, the flexible disciplines on export credits, food aid and state trading enterprises offer a carve-out for a major industrialized country such as the US which doesn’t have to change its current trade-distorting export credits and food aid, a European agricultural official remarked.

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