Yashwant Sinha: Deal on WTO is a half victory

Media reports have suggested that the developing countries have reached an interim agreement on agricultural and food subsidies at the ninth ministerial conference of the World Trade Organisation (WTO) in Bali.

Minister of Commerce and Industry Anand Sharma has claimed this as a victory for the country. He claims that interests of farmers have been safeguarded and legislations such as the Food Security Act are not to be affected. The agreement has been hailed as favourable to India.

The way I look at it is that it is just a half victory for the country and the developing nations. In reaching this interim agreement, India has signed on the final deal on the Trade Facilitation Agreement (TFA). In doing so, it has ignored that in the future if discussions around agricultural subsidies are not in India’s favour, then what will the country bargain with? The TFA was the bargaining chip that we had. And now it has gone away.

It is unclear what impact this agreement will have on the United Progressive Alliance’s Food Security Act. Whether the provisions of the food Act will be called into question for violating the rules of the WTO is an open question and needs to be settled.

Like at other occasions, here too, the developed countries have scored a victory against the developing countries. The developed countries have gained by getting the developing countries to sign on the TFA, without themselves providing any concessions.

As India is a predominantly agricultural country, we need to protect all issues around agricultural subsidies. The outcome of this ministerial suggests that we have got a temporary agreement in exchange for a permanent concession to the developed world.

India should have bargained harder.

-- As told to Akshat Kaushal

Yashwant Sinha is a former Finance Minister (2002-2004) and is the Chairman of the Parliamentary Standing Committee on Finance. He belongs to the Bharatiya Janata Party.