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As the World Trade Organization's (WTO's) ninth ministerial conference came to a close late on Friday, a breakthrough in the talks - the first in the 18-year history of the trade body - appeared imminent, with India claiming to have secured a deal that would give it a free hand in offering farm subsidies for public stockholding and food security programmes.
"I see it as a victory of the Indian farmers. Many doubts were raised, our strength questioned and our capacity to withstand pressure doubted. We stood firm. As a consequence of this decision, procurement operations of developing countries will not be constrained by their existing farm support limits under the agreement on agriculture (of WTO)," Commerce and Industry Minister Anand Sharma told reporters after the release of the draft ministerial declaration.
However, the draft declaration had not been officially adopted by the ministerial conference till the time of going to press, with at least three South American member-countries expressing reservations and speculation still rife that the deal may fall through. In the released declaration, 159 member-countries were said to have accepted India's demand for continuing with the interim solution until a permanent solution was found to the problem of allowing the government more leg room to buy food at administered prices as part of food stockholding programmes, something not allowed under existing rules.
Calling it "India's victory" and a "landmark decision", Sharma said it ensured that rules in respect of agriculture would not come in the way of initiatives aimed at self-sufficiency in food and stabilisation of domestic prices. Besides, it would cover all existing as well as future programmes of public stockholding for food security purposes.
The draft ministerial declaration states: "In the interim, until a permanent solution is found… members shall refrain from challenging through the WTO dispute settlement mechanism." The draft stated that the interim measure would be applicable "in relation to support provided for traditional staple crops in pursuance of public stockholding programmes for food security purposes existing as of the date of this decision".
Sharma clarified that during the interim period India would be immune to all WTO disputes under the agreement on agriculture, ruling out the options of India being challenged under the agreement on subsidies and countervailing measures. The draft declaration states that in order to qualify for this waiver, a developing country must have certain eligibility criteria. For one, it should notify the committee on agriculture that it is at risk of breaching the 'di minis' level or the minimum amount of domestic support that can be given by a country even though that distorts global trading rules.
Speaking on the issue, Sharma said there was "imminent danger of breaching the level in the near future".
Developing countries are allowed to offer food subsidies to the limit of 10 per cent of the total agriculture produce. For developed countries the limit is 5 per cent, according to the present rules of agreement on agriculture.
Besides, the deal worked out on Friday, which was also seen as a "victory" for the new Brazilian director general Roberto Azevêdo, approved the Trade Facilitation Agreement (TFA). According to Azevêdo, it could induce $1 trillion into the global economy in the form of reduced transaction costs due to streamlining of customs procedures across international borders.
For India, the TFA would entail legislative changes. However, being a developing country, it will be given financial assistance as well as adequate time to bring about the changes.
"Trade facilitation, by and large, India had been a strong proponent of. There were issues which were negotiated. We have already implemented some of the measures under the Foreign Trade Policy of 2009-2014," said Sharma.
THE RELEASED DRAFT
- The pact would help developing countries reduce transaction costs and improve domestic competitiveness
- Each member would be required to publish information on imports, exports and transit procedures
- Member-nations would be mandated to provide opportunities to traders to comment on the proposed introduction or amendment of trade laws
- The pact would help in the smooth flow of good in sectors such as agriculture and pharmaceuticals
- As a developing country, India would be entitled to adequate transition time for implementing the trade facilitation agreement
