India not isolated at WTO, asserts government
Aug 07 2014 , New Delhi
“We have not been isolated,” commerce and industry minister Nirmala Sitharaman asserted adding apart from open support from Bolivia, Venezuela and Cuba, other countries who were sympathetic to the Indian cause are Zambia, Jordan, Ghana, Malawi, Egypt, Sri Lanka, Bangladesh, Nepal and Saudi Arabia.
These countries along with China, which also had minimum protection price (MPP), favoured food security as they too provided production subsidies to farmers in their respective countries like India, Sitharaman told the Rajya Sabha. Members in upper house sought clarifications on a statement made by her on the stand off at WTO due to tough stand taken by India. This kind of subsidy is there in Indonesia as well, she said.
India would work towards hastening the WTO talks to find a permanent solution to this vexed issue hopefully by September so that this “Damocles Sword” does not hang over India and other developing countries until 2017, the deadline set at the Bali ministerial declaration, she said.
Assuring members that India will never compromise its sovereign right to decide on minimum support price to protect the interest of the poor farmers, Sitharaman explained how the calculation of this production subsidy was faulty at the WTO.
The first injustice in the calculation is taking 1986-88 price as base price. Because it has not been indexed, the subsidy on wheat per kg works out to around Rs 9.56 as against the actual subsidy of only Rs 4.46 per kg. This is a serious distortion, she said, adding it is precisely for this reason that G-33 countries had asked for dynamic pricing by taking average of previous three years price to determine the subsidy amount every year.
The Uruguay round of multilateral trade negotiations, which began in 1986 and concluded in 1994, resulted in setting up of WTO from January 1 1995, which had taken the base price of 1986-88. “How can that base price be valid 30 years later,” she asked.
Taking an aggressive posture, Sitharaman said India will not only work for finding permanent solution to the issue of food security and public stock holding but phased reduction of billions of dollars subsidy provided by US, European Union and other industrialised nations to its agriculture and farmers that distorted the global food prices.
These subsidies are called non-price and non-tariff barriers and hence considered not as trade distorting subsidies. She said these issues need to addressed and government is making efforts to ensure that reduction and disciplining of farm subsidies are on par with the Doha development round. “We will ensure that other trade constraints are also going to be equally addressed. This is not forgotten,” Nirmala Sitaraman said.
Dismissing criticism that India has been “humiliated” because of not meeting the July 31 deadline for concluding trade facilitation agreement which may translate to an additional $1 trillion trade, Sitharaman said many developing countries were appreciative of India for standing firm on the food security issue as it was a livelihood concern for nearly one billion poor in the world.
“ I must tell you there was no loss of face,” she said, adding India has not back-tracked from its commitment to standardising global customs rules called trade facilitation agreement but has used it as a bargaining chip to work out a single undertaking on the three issues — namely trade facilitation, public stock holding and some implementations issues pertaining to least developed countries.
India had to take drastic step as there was very little progress on public stock holding and LDC issues since Bali declaration in last December. The progress was rapid only on TFA as it was of interest to industrialised nations, which adopted dilatory tactics to stall negotiations on other two issues.
India was therefore getting “worried” that none of the western countries would come to talk about permanent solution on public stock holding if it had ratified the Trade Facilitation Agreement (TFA).
She said India was “wary” as developed countries are looking at plurilateral agreement and moving away from the central philosophy of WTO, which is multilateral.
“Therefore, we want to ensure if we do not sign TFA, they (western countries) will understand the issue of public stockholding has to be addressed,” Sitaraman said.