BackUS proposes to clarify Bali pact
The US told the WTO it is ready to clear up 'ambiguity' over how long developing countries such as India can breach an agreed farm subsidy cap
Premium
New Delhi: In an effort to end the deadlock over the Bali agreement, the US told the World Trade Organization (WTO) on Monday it is ready to clear up “ambiguity" over how long developing countries such as India can breach an agreed farm subsidy cap without inviting legal action at the Geneva-based world forum.
But, the US said—without naming any country—India too must agree to drop its demand of linking a permanent solution to the food security issue with adopting a trade facilitation agreement (TFA).
“If the issue is one of clarification, the United States is ready—as we were in July—to clarify ambiguity concerning the duration of the Due Restraint Mechanism, so long as such clarification occurs coincident with adoption of an appropriate protocol of amendment and does not entail a reopening of the Bali package," Michael Punke, the US ambassador to the WTO, said in a statement at an informal heads of delegation meeting of the organization at Geneva.
Commerce secretary Rajeev Kher said India had been prepared to accept a clarification to the Bali declaration on public stockholdings of foodgrains on 31 July, but now that negotiations have resumed at Geneva, India is back to its original demand seeking a permanent solution to the contentious issue.
“However, I am neither rejecting nor accepting the proposal (made by Punke)," Kher added.
Punke, in his statement that did not name India, said that if the implementation of the TFA is held hostage to a permanent solution on public stockholdings, then “we and many others would see it as fundamentally rejecting the Bali package. That is untenable, and would have serious ramifications—for Bali, for the post-Bali work programme and for the WTO itself".
WTO negotiations resumed in Geneva on Monday after a summer break for officials. Members failed to address India’s demand of finding a permanent solution on the issue of food subsidies, which it linked to agreeing to the TFA, scheduled to have been adopted by 31 July.
At the heart of the problem is a WTO rule that caps subsidies to farmers in developing countries at 10% of the total value of agricultural production, based on 1986-88 prices. Developing countries complain that the base year is outdated and that they need to be given leeway to stock enough grains for the food security of millions of their poor. Developed countries say India had agreed to make trade facilitation a WTO rule by 31 July, while a permanent solution to the food security issue will be found only by 2017. India argues that keeping different timelines for various parts of the Bali package is against the WTO rules of a single undertaking where everything needs to be implemented simultaneously.
India believes progress on the trade facilitation accord, which suits wealthy nations, has been quicker than that on food security.
Abhijit Das, head of the Centre for WTO Studies at the Indian Institute of Foreign Trade, said clarifying that the interim solution is open-ended will only be partially useful since there is no guarantee that developed countries will engage in finding a permanent solution to the matter.
“An open-ended interim solution is not a substitute for finding a permanent solution on the issue of public stockholding. The current notification norms under the interim solution are very stringent. It also does not allow a country to launch a new food security scheme which could be trade distorting," he added.
In his opening remark to the informal heads of delegation meeting on Monday, WTO director general Roberto Azevedo said on the issue of the Bali decisions, there seems to be a clear interplay between concerns relating to the negotiations on public stockholding for food security purposes and the adoption of the protocol of amendment on the TFA.
“However we know that strict parallelism is not possible. One negotiation was concluded in the Bali package. The other negotiation was launched by the Bali package. That is the plain fact of the matter—indeed all of the Bali decisions have their own very specific timetables which advance at different paces. Nonetheless, we must find a way of providing comfort for those with outstanding concerns on food security," he added.
Joao Cravinho, ambassador and head of delegation of the European Union to India, said in an interview that there is hope that in the next month or two, members can break the current deadlock. However, he said this would depend on India’s approach in Geneva.
Cravinho also added that, unlike some other delegations, the EU was not opposed to the demands that India made in July.
“We fully understand the need for food security. There is absolute sympathy from the European side on food sympathy. But we think the agreement reached at Bali would have been sufficient. The new (Indian) government thought the Bali agreement was not sufficient or not appropriate and, therefore, made new demands. We were in a position at the end of July in Geneva to go along with the request made by the Indian government for the general assembly to make a declaration. Other parties at the WTO were not of that same view. So we could not reach an agreement. That deal did not happen, so we have to look for a new formula," he added. Signalling further intense activity to get India on board for an early end to the WTO deadlock, British High Commissioner to India James Bevan met commerce minister Nirmala Sitharaman on Tuesday. Bevan posted on Twitter later that he discussed WTO talks and other matters of mutual interest with Sitharaman.
The issue could also feature in discussions between commerce secretary Kher and visiting deputy US trade representative Wendy Cutler on Wednesday.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
