Govt working with WTO on trade agreement: Commerce Minister

Says India believes in the Bali agreement but a course correction is needed

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The Union Minister of State for Commerce, Nirmala Sitharaman today said that the Government is working hard to facilitate with the World Trade Organization (WTO) on trade facilitation agreement (TFA). India fears that agreeing to the trade facilitation agreement (TFA) could compromise its own food security.

Speaking to reporters at the Chennai Airport, the Union Minister, who arrived here to attend a private function, said that while the Centre is working hard to facilitate, one cannot neglect the necessity for storing food grains and providing subsidy to farmers in need. The government is strongly hoping to get a resolution from WTO.

She said, "I am very hopeful that we will come up with positive solution to this problem. It is important for us to understand that we definitely believe that the Bali agreement will have to be implemented. But there is a course correction which is required in the national interest."

"It is necessary to have public stock holding of food grains. Because, poor farmers will have to be given protection. That is the point we have raised. Therefore, it is important to engage with WTO and we are hopeful to get some good outcome," said the Union Minister.

India is trying to find a solution to the food stockpile issue at the WTO negotiations beginning next month at Geneva, which will also result in signing of the trade facilitation agreement.

Earlier the Union Minister said that India's stand, which had led to collapse of the WTO Geneva talks on July 31, without a permanent solution, public stock holding programmes in India and other developing countries will be hampered by the present ceiling on domestic support which is pegged at 10% of the value of production and is wrongly considered as trade-distorting subsidy to farmers under existing WTO rules.

Reports stated that, India had decided not to ratify WTO's TFA, without any concrete movement in finding a permanent solution to its public food stock-holding issue for food security purposes.

India has asked the WTO to amend the norms for calculating agri subsidies in order to procure food grains from farmers at minimum support price and sell that to poor at cheaper rates without attracting any penalty in the WTO.

The current WTO norms limit the value of food subsidies at 10% of the total value of food grain production. However, the support is calculated at the prices that are over two decades old, according to PTI report, which added India is asking for a change in the base year (1986-88) for calculating the food subsidies. It wants the change to current base year.

There are apprehensions that once India completely implements its food security programme, it could breach the 10 per cent cap. Breach of the cap may lead to imposition of hefty penalties if a member country drags India to the WTO, the report added.