India does not agree with the “spin” being given by some Western countries as well as the observation by World Trade Organisation Director-General Roberto Azevedo that there will be “significant consequences” after the collapse of talks on a trade facilitation agreement.
Senior officials pointed out that there was nothing sacrosanct about the WTO Ministerial meeting in Bali setting a July 31 timeline for a pact on standardisation of Customs rules worldwide (or Trade Facilitation Agreement) especially because the issue of poor countries feeding their poor was equally important.
“WTO Ministerial meetings are held every two years. The next one will take place in 2015. The inability to agree on TFA does not mean the WTO has been wound up,” said a senior official, pointing out that India’s request for a solution on food subsidy will again be discussed and negotiated when Ambassadors to the WTO reconvene in Geneva after a month.
India has stayed away from backing the TFA because there has been no concrete progress in the WTO community agreeing to a permanent solution to public stockholding for food security. This essentially means addressing the problem of WTO limiting subsidies to 10 per cent of the total value of agricultural production based on 1986-88 prices.
India and other developing countries, notably the Group of 33, argue that the base year is outdated.
Giving a sequence of developments over the past week leading up to July 31 midnight, officials pointed out that both India and the WTO D-G had tried till the last to reach a solution on food subsidies so that India would allow the trade facilitation agreement to be finalised.
The pace picked up after July 25 when Indian Ambassador at WTO Anjali Prasad read out a statement detailing India’s stand that both decisions at Bali must be negotiated and finalised simultaneously.
Two days later, during a conversation with the WTO Director-General, Commerce Minister Nirmala Sitharaman accepted his suggestion for proposals to resolve the stalemate. On July 28 — on India’s request — the WTO D-G gave a note suggesting a more specific work programme on the food subsidy issue. It essentially suggested a month-by-month schedule of meetings beginning from September till December.
Examining the fine-print, India found that there was no assurance of a permanent solution after December. “The main issues were still untouched,” said an official familiar with the WTO D-G’s note. While recognising that the WTO D-G had taken a problem-solving approach, India nevertheless wanted a permanent solution rather than an approach that deferred the issue by a few months.
New Delhi than asked its Ambassador to meet Mr. Azevedo and explain how India and other poor countries would like the issue to be addressed. Accordingly, Ms. Prasad sought a linkage between TFA and food security, agreed with the month-by-month sequencing proposal, suggested indexing to local inflation rates and a permanent peace clause if food subsidy breached the WTO cap.
When the WTO General Council sat down for the last time this season, India suggested that it would be satisfied if everyone agreed on a peace clause till a permanent solution was negotiated and adopted. This and other options were further nuanced but that was not to be as the WTO General Council broke up with no unanimity among its 160 members.