At a meeting between Prime Minister Manmohan Singh and Commerce & Industry Minister Anand Sharma it was agreed on Friday that India cannot agree to the Peace Clause for agriculture subsidies that the World Trade Organisation (WTO) Director-General Roberto Azevedo has proposed for Bali.
In no situation can India’s food security be dictated, said Dr. Singh at the meeting, according to highly-placed Commerce Ministry sources. The Prime Minister’s instructions are that “India will not agree to any deal at Bali until it is certain that the proposed interim solution will be available till a permanent solution to the issue of India’s minimum support prices (MSP) breaching the WTO norms has been found and agreed to,” the officials told The Hindu.
The Commerce Ministry plans to seek the Cabinet’s approval for this position at Bali. “The food subsidies under the Food Security Act we are not even discussing...that’s our sovereign space,” Mr. Sharma told The Hindu. India is negotiating in Geneva safeguards for its administered MSPs. “The MSPs will only rise with the roll out of the Food Security Law,” Mr. Sharma said.
The deal breaker for India is the lack of clarity on when the proposed Peace Clause, an interim safeguard for MSPs in breach of the WTO caps, will expire. India, said the officials, also cannot afford to not have any deal at all at Bali for then there will be no safeguards against the breaches of the WTO caps.
The text for Bali, a copy of which The Hindu has accessed, states that the Peace Clause “will remain in force until the 11th Ministerial Conference, at which time we will decide on next steps in view of the General Council’s further report on the operation of this Decision and of the Work Programme decided in paragraph 7.”
“The clause can imply that should no solution or agreement be reached at the eleventh Ministerial conference, the protection from the Peace Clause will end and its extension will be have to be renegotiated — an eventuality India doesn’t want,” said a senior Commerce Ministry official.
Work programme
The Work Programme, according to the text, is to “be undertaken in the Committee on Agriculture to pursue this issue with the aim of making recommendations for a permanent solution.”
The Peace Clause is conditional on full disclosures on the MSPs that are at risk or have breached the WTO limits and the annual procurements undertaken for food security purposes for each public stockholding programme.
On November 11, Mr. Sharma wrote to the United States Trade Representative Michael Froman “...excessive conditionalities imposed on a Peace Clause would lead to serious concerns that we will be required to change our domestic policy.”