WTO meeting: China, India differ on food subsidy


December 4, 2013

BALI: India is under pressure, including from allies like China and Indonesia, to agree to the four-year "peace clause" at the World Trade Organization (WTO) meeting, but is sticking to its tough stand, at least for now.

December 4, 2013

BALI: India is under pressure, including from allies like China and Indonesia, to agree to the four-year "peace clause" at the World Trade Organization (WTO) meeting, but is sticking to its tough stand, at least for now.

Union minister of commerce and industry Anand Sharma with Gao Hucheng, minister of commerce of the People’s Republic of China at a meeting on the sidelines of 9th WTO Ministerial meeting in Bali on Tuesday.

India and several developing countries, including Indonesia and China, want the cap on food subsidy at 10% of the value of production reworked as domestic support levels have shot up almost six times since the WTO deal on agriculture was decided two decades ago. This raises the prospect of them breaching the cap, and facing penalties. A peace clause will ensure those going past the mandated level do not face action at the WTO. India is keen that instead of the truce lasting four years, the peace clause should be in place till a permanent solution is found.

The Chinese trade minister told commerce and industry minister Anand Sharma that he backed a successful WTO meet, though China appreciated India's "strong position" on food security. He also recalled China's sacrifices.

He is learned to have recounted how China had made sacrifices when it joined the WTO a decade ago but had managed to emerge as a strong exporter of farm products.

He also said every country had made some sacrifice in reaching the current stage of negotiations where a four-year peace clause was being offered. Sharma responded by saying it was only a small nudge that was needed as the elephant had passed through the door and only the tail remained.

Indonesia, which chairs the G-33 that is piloting the food security plan, also highlighted the need for flexibility. "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. There needs to be flexibility from some sides for this to work," Indonesian trade minister Gita Wirjawan said.

On Monday, Egypt, which chairs the Arab League, had also backed a "successful outcome". WTO members are backing an agreement on trade facilitation that will ease customs rules and make flow of goods through airports and ports easier. But India is linking the talks on trade facilitation with its demand on food security. To address India's demand that the peace clause be in place till a permanent solution is found, Wirjawan said, "It's a question of how the shape of the interim solution that will link itself to the permanent solution (will be)… I am suggesting not a longer peace clause but a better defined mechanism of linking the interim to the permanent." Against India's demand, the WTO members are looking at a four-year peace clause, which the government believes is unlikely to yield results.

In fact, during a meeting with Nepal, which leads the group of least developed countries, the Indian delegation is learned to have said that it does not expect a solution in four years as developed countries will only delay it. India fears that by agreeing to the four-year clause, it will only end up accepting that it is close to breaching the 10% cap. "They (developed countries) will not even need lawyers, they will just file a case to seek penalties," an Indian negotiator is reported to have said at the meeting on Tuesday, while seeking the support of poor countries on the issue.

Despite the pressure, India seemed to be holding firm. An official statement said that during his meetings on Tuesday, commerce and industry minister Anand Sharma stated that the outcome of the WTO conference "is the collective responsibility of the entire WTO membership, and a fair, balanced result would be possible only if the genuine concerns of developing countries including India are satisfactorily addressed". It also said that during a meeting of trade ministers from India, Brazil and South Africa, the other two countries backed New Delhi's position and wanted to know how best these could best be accommodated in the Bali package.

In private, officials admitted that there would be pressure to agree to the deal but the government is willing to go the distance to ensure that its demands are met.

Courtesy: PTI


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