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Geneva: More than 100 countries have backed a joint proposal by China and India for eliminating the most trade-distorting farm subsidies of $160 billion in the US, the European Union, Japan, Canada, Norway, and Switzerland among other nations at the upcoming World Trade Organization’s 11th trade ministerial summit in Buenos Aires, said people familiar with the development.

But Argentina, which is hosting the summit beginning on 10 December, warned that the China-India proposal is a recipe for the breakdown of the Buenos Aires meeting, said a person who asked not to be named.

On another mandated issue concerning the permanent solution for public stock-holding (PSH) programmes in developing countries, India has served notice to its the European Union, Australia, Argentina, Brazil, Paraguay and Pakistan among others that New Delhi will not offer any further concessions for market access or enter into trade-offs in the negotiations for a permanent solution on PSH programmes at the Buenos Aires meeting.

During informal meetings for finalizing the outcomes in agriculture at Buenos Aires last week, India’s trade envoy J.S. Deepak mobilized support of a large majority of developing and poorest countries for securing credible outcomes on the permanent solution for PSH programmes as well as the elimination of trade-distorting farm subsidies, the person said. Deepak told his counterparts on 15 September that “India had already paid during the current Doha Round of negotiations", implying India had already agreed to provide market access in areas sought by others, including the trade facilitation agreement.

The time has come for India’s core demand for an effective permanent solution for PSH programmes for food security in developing countries at the Buenos Aires meeting, he said, according to the person present at the meeting.

Indonesia, India, China and other members of the G33 coalition tabled a draft legal text for finalizing the permanent solution on PSH programmes. The G33 proposal called for incorporating a new annex in the WTO’s Agreement on Agriculture for exempting PSH programmes from subsidy reduction-commitments. Indonesia said the group will not accept “onerous and cumbersome transparency requirements" as demanded by some opponents.

In sharp opposition to the G33 proposal, Australia, Paraguay, and Pakistan among others said they will not accept the permanent solution for PSH programmes unless it contains strong safeguard and transparency provisions.

The EU, Brazil, Peru, Colombia and Uruguay circulated a proposal for exempting PSH programmes for food security from subsidy reduction commitments along with a proposal for reducing the overall trade distorting domestic support on a percentage basis.

The EU-Brazil proposal also called for intrusive transparency and notification provisions for implementing PSH programmes.

India’s trade envoy said India will not accept any linkage between the permanent solution for PSH programmes on the one side, and an agreement for reducing the overall trade-distorting domestic support as demanded by the EU and Brazil along with their partners on the other, according to another trade official from a South American country who attended the meeting.

On the joint China-India proposal for eliminating most trade-distorting domestic subsidies in industrialized nations, many countries—the Africa Group, the ACP (Africa, Caribbean, and Pacific) group, the least-developed countries, as well as South Africa among others—said it is the best option for pursuing the reforms in agriculture.

In their proposal, India and China said it is a prerequisite to address “the imbalance in the existing AoA (Agreement on Agriculture) where only some members (the US, the EU, Japan, Canada, Switzerland, Norway and a few developing countries) have access to bound AMS "—bound Aggregate Measurement of Support (entitlements to provide billions of dollars for most trade-distorting subsidies)" —which allows them much “more policy space."

“On the other hand, most developing Members are strictly limited by their de minimis," and “any overall capping or reduction in their de minimis will further reduce their policy space for developing countries," the two largest developing countries argued.

“Therefore, in order to achieve the long outstanding reforms in agriculture subsidies the AMS entitlements of developed Members [the US, the EU, Canada, Norway, and Switzerland among others] must be eliminated as a prerequisite for consideration of other reforms in domestic support negotiations," China and India argued.

“Only in this way will it help reduce some of the inequities built into the WTO rules in favour of the developed countries," they argued.

Opposing, Argentina said the joint proposal will lead to a collapse of the Buenos Aires meeting. The European Union and Brazil also opposed to China-India proposal.

The EU, Brazil, Peru, Colombia, and Uruguay called for reducing the overall trade distorting domestic support in both industrialized and developing countries on a percentage basis.

Australia, which had tabled another joint proposal with New Zealand, Canada and Paraguay for reducing the overall trade-distorting domestic support on a nominal basis, said it is willing to work with the EU for preparing a compromise proposal.

The US expressed scepticism at the continued differences among members, suggesting that Buenos Aires meeting must be used for reflection rather than reaching substantive agreements.

The US is going to neither accept the permanent solution demanded by India and the G33 group, nor the China-India joint proposal for eliminating the AMS, said a South American trade envoy who asked not to be identified.

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