Cold comfort in Nairobi

Doha round not dead, but has made little progress

The 10th ministerial meeting of the World Trade Organisation (WTO) at Nairobi essentially failed to strike a much-needed balance between the interests of developing and developed countries in international trade. Uncertainty continues over the fate of the Doha Development Agenda (DDA), which aims broadly at facilitating greater participation of developing countries in global commerce. The Nairobi declaration does vow the continuation of the Doha round of talks that began in 2001; but the assurance to this effect is not unqualified. The declaration makes it a point to state that many WTO members (read developed countries) do not reaffirm their support for the Doha mandate as they believe that new approaches are necessary for the success of multilateralism in cross-border commerce. Unsurprisingly, India has lost little time in expressing its disappointment at the outcome of the Nairobi ministerial meeting. Many of its concerns have not been addressed. The only solace for New Delhi is that the status quo on some issues it considers critical, including the "peace clause" for food stock holding, has not been disturbed. This arrangement binds other countries to refrain from challenging India's foodgrains procurement operations at minimum support prices and stock holding for the public distribution system, till this issue is finally resolved.

At Nairobi, a decision was taken to end export subsidies for agriculture. But the larger question of farm subsidies remains open. Total farm and food subsidies in India in 2014, for instance, amounted to about $40 billion, whereas these were $59 billion in the European Union and $86 billion in the US - if $12 billion support to farmers and $74 billion in the form of food stamp income support are included. Going by the findings of a study conducted by the Geneva-based International Centre for Sustainable Development, the US cotton subsidy in 2014 resulted in lowering global cotton prices by nearly seven per cent, causing losses to cotton growers and exporters in Africa and India.

Another vital issue that remained only nominally addressed at Nairobi related to "special safeguards mechanisms". These are meant to curb sudden increases in imports of commodities, which could hurt domestic agricultural interests. Developing countries, including India, have long demanded substantial safeguards of this nature, arguing that they might need to raise tariffs temporarily to deal with surging imports and a consequent crash in domestic prices of select commodities. Indian negotiators claim they might need to limit the inflow of some fruits, especially apples, and dairy as well as poultry products. The Nairobi declaration has certainly extended the right to developing countries to use the special safeguards mechanism selectively; but it has, at the same time, laid down that this issue would be discussed and reviewed again later on. Thus, on the whole, the outcome of the Nairobi ministerial meeting, which has been widely welcomed by developed countries, provides only cold comfort to the developing world.