Peace Clause: India may lose G33 support

China, Indonesia ready to agree to a four-year interim solution

On the first day of the World Trade Organization (WTO)'s ninth ministerial conference (MC9) in the picturesque Indonesian island of Bali, India seems to be losing the support of the G33 coalition of developing countries in taking a strong position on the proposed Peace Clause.

While India has stressed on continuing the four-year Peace Clause, which seeks to do away with the cap on food subsidies for farm support in developing countries, till a permanent solution is agreed upon by all the 159 members, key G33 countries such as China and Indonesia hinted they were willing to agree to the interim period of four years.

Sources quoted Chinese commerce minister Gao Hucheng as saying that while China "supports and appreciates" India's stand on the Peace Clause, it will ensure a positive outcome is achieved.

Indonesia, too, said it's difficult to arrive at a permanent solution right now. "I think India comes strong in terms of linking the interim solution to the permanent solution, but we also understand where the other guys are coming from. I think there needs to be flexibility from some side for this to work. I think it is inconceivable to find a permanent solution here. I think we can only strike an interim solution here but it's a question of how the shape of the interim solution that will link itself to the permanent solution," Indonesian trade minister Gita Wirjawan, who is also the chair of MC9, said on the sidelines of a press conference here.

Commerce and Industry Minister Anand Sharma said on Tuesday that a positive outcome of the WTO MC9 is "the collective responsibility of the entire WTO membership" and that food security concerns is a "common concern" of all developing countries.

The interim measure has become a sensitive issue in India, especially in the wake of the general elections next year. Political parties, farmers and some sections of the civil society groups are vehemently opposed to it.

It is crucial for India and other developing countries to get the subsidy regime changed under the Agreement on Agriculture (AoA) to continue giving subsidies within their domestic constituencies in future.

At present, under the AoA, subsidies given for domestic support measures and export up to the level of 10 per cent of the value of the total agricultural production are exempted from any challenge. However, the base price taken for calculating subsidies is taken at 1986-88 level, when prices were low.

India and China are already on the threshold of breaching the permissible level due to a rise in global food prices and the G-33 has been pushing the WTO to change the AoA.

Sharma is expected to make a statement elucidating India's official position at the WTO MC9 on Wednesday.

On Tuesday, he held a series of bilateral meetings with China, the European Union (EU), Brazil, South Africa and Chad.

The day was also marked by sporadic protests by civil society groups and NGOs demanding cancellation of the talks.

ROCKY PATH
|While India has stressed on continuing the four-year Peace Clause till a permanent solution is agreed upon by all the 159-members, key G33 countries hinted they are willing to agree to the interim period of four years
|The interim measure has become a sensitive issue in India, especially in the wake of the general elections next year