India may have to settle for a temporary solution to its concerns about the validity of its Food Security legislation at the World Trade Organisation in return for its consent for a pact to facilitate movement of goods across borders being pushed by developed countries.

A “peace clause” that would allow developing countries like India legal protection against action by other members for breaching food subsidy limits for a two-three year period is what developed countries seem to be willing to offer at the moment.

WTO members are trying to arrive at an agreement on a small package of issues that includes Trade Facilitation and Food Security at the forthcoming Ministerial meeting in Bali, Indonesia.

'Long-term solution after Bali'

“There is appreciation of legitimacy of food security concerns in India and other developing countries. Work is going on intensely to find a solution which will probably include a peace clause and a conversation for a long-term solution will happen very meaningfully after Bali,” visiting WTO Director-General Roberto Azevedo said at a press conference on Monday.

Azevedo is in India to seek the country’s support for a successful Ministerial in Bali. The Doha Development Round, launched 12 years back, remains stuck, but members are hopeful that a limited agreement in Bali would give the Round a much-needed boost.

Although India had been demanding a change in the WTO’s Agreement on Agriculture to remove limits on public stockholding and food aid, it now seems willing to go in for a compromise solution.

The Agreement allows so called ‘market distorting subsidies’ up to a limit of 10 per cent of total production. India is apprehensive that once its Food Security legislation is fully implemented, its food subsidies will breach the 10 per cent mark.

Sharma said that India was in favour of a trade facilitation pact too as long as it was balanced and served the interests of both developed and developing countries.

Stressing the importance of the December Ministerial in Indonesia, Azevedo said that it was absolutely critical in establishing the conditions for moving forward in areas other than the deliverables which members were looking for in December, not only in the Doha Development Agenda, but also in other issues that are trade related and also of interest to member countries.

“Bali is not the end of the road. It is one first step towards an agenda that we have to define for the WTO and that delivers on areas of interest in developing countries and developed countries alike,” the DG added.

(This article was published on October 7, 2013)
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