At WTO Summit, India asks developed countries to cut farm subsidies

Published On: 12, Dec 2017 | Source:

India on Monday sought a permanent solution to the critical issue of public procurement programme at the ongoing ministerial of the World Trade Organization (WTO) itself and asked the developed world to trim their massive trade-distorting farm subsidies without putting the onus of a reduction in such dole-outs on developing nations. Speaking at the plenary session of the 11th ministerial conference, commerce and industry minister Suresh Prabhu also sought a special safeguard mechanism (SSM) to protect farmers from unusual shocks delivered by cheaper imports, in sync with a mechanism that already exists for the developed countries. Prabhu asked the member-nations to desist from jumping to new issues like e-commerce or investment facilitation without settling the old ones — those in the Doha development agenda (DDA), including a reduction in huge trade-distorting subsidies by the rich nations.

Prabhu reiterated India’s pledge for a rule-based multilateral trading system (the WTO framework) and expressed concern at the “inordinate delay” in the appointment of new members to the crucial Appellate Body that is central to the WTO’s dispute settlement mechanism. Earlier this year, the US blocked the appointment of new judges at the WTO to hear international disputes.

Separately, sources indicated that India could look to block any proposal to put investment facilitation on the negotiating agenda, as sought by the Friends of Investment Facilitation for Development (FIFD) grouping of 11 WTO members, including China, Argentina and Brazil.

“At MC11 (current ministerial conference) we look forward to constructive engagement of the entire WTO membership for taking final decisions in areas where specific mandates were provided at Nairobi (last ministerial in December 2015),” Prabhu told the members.

He stressed the permanent solution for public stockholding for food security purposes is a matter of survival for eight hundred million hungry and undernourished people across the globe and made it clear that “we cannot envisage any negotiated outcome at MC 11, which does not include a permanent solution”.

While India has got a permanent peace clause for public stockholding (which protects food procurement programmes against penal action from WTO members in case subsidy ceilings are breached), this concession is basically restricted to the programme running in 2013 — during the Bali ministerial when the peace clause was first secured. This means no new procurement programme will be covered by the clause if the subsidy ceiling is breached there. Also, the clause comes with cumbersome notification obligations on farm subsidies doled out by these countries. India wants a better solution than the status quo that makes compliance easier and concession more substantial for developing nations. While India’s major procurement programmes are covered, many in the G33 grouping of developing nations — especially the African countries, and even China — could be affected unless a reasonable and lasting solution is worked out.

The minister drew attention to the existing Agreement on Agriculture that provides considerable flexibility to the developed members to provide huge subsidies and further, to concentrate these subsidies on a few products. “This asymmetry needs to be addressed as a first step in agricultural reform through a post-MC11 work programme without, however, shifting the burden of reduction of agricultural subsidies to developing countries,” he said.

Earlier this year, in a joint paper submitted with the WTO, India and China said the developed world, including the US and the EU, cornered 90% of the farm subsidy entitlements, amounting to $160 billion a year. On fisheries subsidies, India wants a future work group that will strive for an outcome at the next ministerial in 2019.

India said agreeing to new issues without settling the Doha agenda would be extremely divisive. “Many of these issues are neither trade-related nor have these been discussed in detail. For instance, on e-commerce, India’s view is that gains from it must not be confused with gains from negotiating binding rules in this area. It is for this reason that we support continuation of the 1998 Work Programme with its non-negotiating mandate,” Prabhu said.