Economy

African countries back India-China stand on curbing rich nations’ farm sops

Amiti Sen New Delhi | Updated on January 10, 2018

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Battlelines drawn for December WTO Ministerial as EU, Brazil counter linking public stock-holding to domestic support

A joint India-China paper for disciplining the so-called trade-distorting farm subsidies given by rich countries has found backers in African nations, including South Africa, Zimbabwe and Egypt.

With just three months to go for the crucial Ministerial meet of the World Trade Organisation, in December, battlelines are getting drawn with those opposed to the India/China stand on subsidies and their demand for prioritising a solution on public stock-holding, too, getting a traction, a government official told BusinessLine.

A submission by the EU and Brazil, linking issues of public stock-holding to domestic support, received enthusiastic endorsement from many developed and some developing nations at a recent meeting of the Committee on Agriculture (CoA) even as India and the G-33 group of developing countries opposed it.

“It is heartening that the joint paper by India and China has generated a lot of interest at the WTO with many developing countries insisting that it be a starting point of future negotiations. But we can’t ignore the fact that the group of countries opposing the meagre subsidies that India gives is also powerful. We have to contradict them with logic and numbers,” the official said.

In their paper, India and China have pointed out that developed countries have cornered more than 90 per cent of global Aggregate Measurement of Support (trade distorting subsidies) entitlements amounting to nearly $160 billion and this need to be eliminated.

At the CoA meeting, which attempted to shortlist the agenda for the Buenos Aires Ministerial, Botswana (for the African, Caribbean, and Pacific Group of States or the ACP Group) and Egypt (for the African group), supported by South Africa and Zimbabwe, welcomed the Indía-China proposal as the starting point for negotiations.

Egypt went further and suggested that norms to address blue box support and green box subsidies (permissible subsidies not linked to production) should also be introduced, as also rules to avoid “box shifting” (changing the features of a subsidy programme to make it non-actionable).

The EU rejected the India-China paper on the ground that it would create an imbalance between developing countries. “Such a narrow focus on just one accounting mechanism of trade-distorting support presents a highly inaccurate picture of the reality of agricultural subsidies in major players,” the EU added.

In its own paper co-authored with Brazil, the EU insisted on a linkage between public stock-holding and domestic support, while recognising the mandate to find a permanent solution to the public stock-holding issue.

“Our concerns that the developed countries would try to wriggle out of the commitment to give a permanent solution to the issues surrounding public stock-holding by linking it to other issues is coming true. But we will not allow it to happen as a permanent solution by 2017 was mandated at the Nairobi Ministerial meet in December 2015,” the official said.

Published on September 15, 2017

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