World Trade Organisation Director-General Roberto Azevedo will be in New Delhi on Monday to seek India’s support for a possible agreement on a small package of issues at the Bali Ministerial meet in December.
Union Commerce and Industry Minister Anand Sharma, in his meeting with Azevedo, is likely to reinforce India’s stated position that any outcome at Bali must take care of the country’s concerns on food subsidies, a Commerce Department official said.
With the decade-old Doha Round of trade talks — which aims at further lowering barriers for goods and services — failing to deliver results, WTO members are now aiming for a limited agreement in Bali to infuse some life into the round.
Brazil’s Azevedo replaced France’s Pascal Lamy as the DG in September this year.
Important issues
A pact on trade facilitation and changes in the Agreement on Agriculture (AoA) to allow higher subsidies are the key components of the proposed Bali package.
Developed country members, such as the US and European Union, are the chief proponents of the agreement on trade facilitation that would streamline movement of goods by prescribing time-bound clearance and building of infrastructure.
On the other hand, a group of developing countries, such as India, China, Indonesia and Zimbabwe, are pushing for changes in the AoA that would allow them higher subsidies to support their food security programmes.
“We are very clear. We are not going to support the initiative on trade facilitation till we have an agreement on amending rules guiding food subsidies,” the official said.
It is important for India to ensure that the AoA is amended as it allows so-called ‘market distorting subsidies’ up to a limit of 10 per cent of total production. The limit could get breached when the country fully implements its Food Security law and could attract penalties.
Trade pact
New Delhi is also not in full agreement with developed countries on the provisions of the proposed trade facilitation pact. “The developed countries are trying to clean up the proposals of their interest, while maintaining frivolous objections to proposals tabled by developing countries,” the official said.
For instance, they want India’s proposal on customs co-operation to be accepted on a ‘best endeavour’ basis, while they want that their proposals on ramping up infrastructure and time-bound clearance should be accepted by developing countries on a binding basis.
India is also ready to support issues that may benefit least developed countries (LDCs), which is the third important element of the proposed Bali package. “We would make it clear to the WTO DG that it is not India that has problems with LDC issues. On the contrary, it is the US, which does not seem to be in a mood to remove its subsidies on cotton, which would be the stumbling block,” the official added.