Developed nations back India’s stand at WTO

India said on 12th September it has won the support of major developed countries, including the U.K. and Germany, as also the European Commission, for its stand at theWorld Trade Organisation (WTO)demanding that the implementation of the Trade Facilitation Agreement (TFA) be kept pending unless its apprehensions on the issue of food security are addressed.

Finance Secretary Arvind Mayaram presented India’s perspective at the Eleventh Meeting of the Finance Ministers’ of Asia Europe (ASEM) in the Italian city of Milan on 11th September. Following protracted negotiations, the ASEM agreed to not only drop a reference to non-implementation of the TFA but also include the need for implementation of all of the WTO’s Bali Ministerial decisions in its draft communiqué 

He also garnered the support of Pakistan, Bangladesh and Russia for India’s standpoint. India is not opposed to the TFA as it increases the ease of doing business but wants its adoption postponed till there is “satisfactory” progress on finding a permanent protection for its minimum support prices to farmers against the WTO’s agriculture subsidy caps that are benchmarked to food prices of the 1980s. At the WTO’s General Council meeting in Geneva on July 31, India stalled the ratification of the TFA owing to these concerns.

India got a reference to BRICS and disappointment with poor progress on the IMF quota reforms also included in the ASEM communiqué. The communiqué talks about enhanced cooperation between countries of Asia and Europe to create sustainable and profitable growth.

The reasons for India’s opposing to WTO’s agreement

• According to the WTO rule, public stockholdings must not exceed 10% of the value of food grains produced and calculated at the base price of 1986-88. India says that one cannot calculate current food subsidy limits by 1986-88 prices.
• For most of the developing countries including India, public stockholding for food security is a livelihood issue, a matter which should not be even debated at WTO.
• Developed countries lose nothing if they allow higher public stockholding by developing countries after putting in place a mechanism with reasonable limits to ensure developing countries do not dump their excess cereals at rock bottom prices in the international market.
• Food security is the foundation upon which the United Nations’ Millennium Development Goals to eradicate extreme poverty and hunger stand. Forcing developing countries and Least Developed Countries to agree to anything which may compromise their right to food security will not only compromise basic human dignity but also go against the UN declaration to which all countries are a signatory.
• The government support to farmers in developed countries are way ahead of what developing countries can even afford to provide. For example, while India provides about $12 billion farm subsidy to its 500 million farmers, the US provides around $120 billion to its 2 million farmers. The figures could be contested, but not the trends.
• There is wide realisation in India at the state and central government level about the rising burden of subsidies and there is a serious move to make it more targeted through the use of technology as in the case of the Direct Benefits Transfer programme. To expect it to happen at the pace developed countries wish means one does not understand the complexities of a country like India.