India wants WTO to honour Bali commitments: Nirmala Sitharaman

Siddharth Zarabi | Updated on January 22, 2018 Published on December 13, 2015

NIRMALA SITHARAMAN, Commerce and Industry Minister

Food security issues need to be addressed, says Commerce and Industry Minister

The 10th Ministerial Conference of WTO at Nairobi is expected to take up many contentious issues that were promised at Bali in 2013 but not implemented. Speaking to Bloomberg TV, Commerce and Industry Minister Nirmala Sitharaman says while the overall draft for Nairobi meet is “neutral”, issues like food security need to be addressed. Public stock holding is a sovereign right for the government and that right cannot be taken away by the WTO, she said.

What is the key stance that India is going to take at the WTO, especially on issues like food security?

I will put it this way. The last ministerial was held in Bali in 2013. WTO is a multilateral body and since 2001, it has been talking about a lot of developmental issues and not just trade. Now, when you are talking about development issues, it takes care of many of the concerns of emerging economies, many of the concerns of LDCs, issues related to adjustments such as trade facilitation, which is one of the elements in Bali, whereby efficiency at the ports, efficiency in keeping data about export-import, your customs being available for 24x7 services and ships turnaround from sea ports in a better way, all of which are crucial for better trade.

It is an important thing, for which many countries would say — all right, we have a good standard already, international standard. But, there could be many other countries that will not be able to move an inch forward and a lot of assistance and hand holding have to be done for them. This is one of the elements agreed in Bali. The other elements, which were agreed to and the important one was food security.

India and many countries will be allowed to hold public stock holding in the sense the government can hold certain quantity of grains, one or two or several of them in the interest of giving an opportunity of the poorest of farmers to sell at a rate, which is important for their subsistence. Otherwise, they will not be able to receive what would be available in the free market. So, you would be giving them a support price, which is necessary for them and it is necessary for the government to procure — one, in order to support these farmers; and two, that grain is not released in the market and is not held as a stock pile to distort rate but to help some poorest of the poor consumers who are not able to afford grains at the market price will be given subsidised grains from the public distribution system (PDS).

So, you procure to save some poor farmers and holding the stock pile to distribute through PDS. It has a larger objective for which the Centre is duty-bound to its citizens. Now, do we have a right to hold it? If you are here to just talk about trade and free trade, no, you don’t have a business because it will be seen as trade distorting. You have to hold this and for holding this, you have to prove it is not trade distorting. You have to state how many such grains you do, not just wheat and rice but also corn and many others, then you would also say to what extent are you going to subsidised, what is your minimum support price and what quantum are you going to procure. Is it that every wheat which is produced in the country is going to be obtained by you in the name of PDS or is it only 10 per cent of the production. So, in other words, your public stock holding is a sovereign right for the government and that right cannot be taken away by the WTO.

So, can the Nairobi ministerial achieve a breakthrough for the permanent solution on food security, which is clearly vital for India?

It is not something which is new. In Bali, a permanent solution for public stock holding was agreed to. But, last year, there was this sense that the work plan with a certain timeline was not available for public stock holding and a permanent solution for it, whereas on trade facilitation, things were moving faster. WTO works on the principle of all happening at the same time and everything that has been agreed has to be agreed together. You cannot have one element pulled out such as trade facilitation, and say that we finish this and will keep rest on the side.

So, last year, after this government came to power in 2014, we realised there is no work plan for a permanent solution. Therefore, what we obtained was a peace clause for perpetuity, which gives us the assurance that we can go on to opt for the subsidised trade and it is not going to be considered trade distorting and we are not going to be pulled to the WTO court. Now, when we are going to Nairobi, we want the WTO to honour everything that was committed in Bali.

Is there an expectation that it will happen because in the run-up, we have not seen any positive statements from the developed world on this? There doesn’t seem to be any ceding of grounds that is at least emanating in pre-ministerial briefing?

But, here is where I want to underline the fact that it is not a new demand. Ideally, the ministerial declaration should put all this and reaffirm WTO’s commitment that it will honour everything that was said in Bali.

Are you getting those signals or hints? Has any pre-ministerial draft been shared with the ministry?

The pre-ministerial draft, which is the ministerial declaration’s first draft, has already been submitted with a rider. That rider is that three facilitators have been asked to draft it. They have not been mandated to add issues into it nor have they been mandated to influence the language of the text. Therefore, it is something on which you can work. And to be fair to them, we cannot accuse them of having a draft that doesn’t say much.

In simpler words, is that something that is in India’s favour? Is it neutral for us or is it a negative?

It is neutral. Overall, the draft is neutral not only in the context of food security.

On Special Safeguard Mechanism, what can we expect from the Nairobi ministerial?

For instance, WTO has given every country a level up to which you can impose import duty. Assume there is a commodity in India which you grow, for instance, apples. There is a surge of apples coming from various countries. Now, our apple growers suddenly feel they don’t find a market because subsidised apples are coming into the market from abroad, which are cheaper. The WTO has given us a mechanism wherein I can impose an import duty on all apples coming into the country to make them more expensive so our fellows do not lose out. So, for most of the agricultural commodities, you have a boundary after which you cannot increase the import duty. In the case of apples, we have reached the boundary but still the imported apples are cheap and our apples do not stand up to the competition. Now, what to do? Therefore, I need a Special Safeguard Mechanism through which I will be able to protect my apple growers.

This is not just for India as there are many countries in a similar situation as us. What can be expected on this issue?

On this, my negotiations will have to take me forward. I should be able to convince during my negotiations that this is absolutely critical for economies like in India.

Are you hopeful that there will be a breakthrough?

I am very hopeful. There is a lot of symbolism attached to this meet. It is the 10th Ministerial meaning 20 years after the WTO has been formed, countries have invested a lot of trust in this organisation. It is the only body where every country is treated at par and decision making is done on consensus basis. So, everything is transparent. And, therefore, it is critically important for us to keep it alive. For the first time in WTO’s history, it is being held in Africa. This is symbolic. We cannot have decisions here which are not going to help the institution in the future.

Have you had the occasion to speak to other commerce and trade ministers of like-minded countries in the run-up to the ministerial?

We had a meeting in Turkey when we had gone for the G20 meet. Subsequently, during the RCEP, we met again. Telephonic conversations have also happened.

As the developed countries are seeking, will Nairobi be treated as a new round of negotiation? Is that something that will feature prominently in the ministerial? If so, what would your stance be on this?

That is something on which I am definitely placing an emphasis. There is a school of thought, which says 14 years of past by and Doha Developmental Agenda has not deliberately delivered. It is not leading us anywhere as an argument. That framework is causing delay in the argument. But my issue is that it is the only agenda that spoke about trade and many other things related to development.

Trade is not just that one instrument for bringing development, but there are other things that the Doha agenda spoke about. Even for a minute if I want to be with my opponents or that school of thought, I agree 14 years have passed by. But have we got an answer to why the ministerial Bali has not been delivered? In the sense only two years ago we agreed on a ministerial and we agreed on many things in Bali but were not delivered in two years.

So why recall what has not been delivered in 14 years? Instead of blaming something as far as in 2001, we should put all our efforts to implement and honour Bali, which derived the essence of Doha Development Agenda. Even now it is not too late. Let us honour Bali.

What could, therefore, be the meeting points and your wish-list at Nairobi?

My wish list for Nairobi would be food security. On “no go” or “reject” area, there is an attempt of late to differentiate between developing countries and emerging economies. That differentiation is unacceptable to me. That is based on some countries within the emerging markets growing at a faster rate like India, whose growth rate is 7.5 per cent.

So, they want India to step up its commitment and treat us differently from the rest of the members. My growth rate is 7.5 per cent but my per capita is nowhere in comparison with other emerging markets. If you look at the landscape of India, the difference between one region and another, some parts are so backward and have no basic infrastructure. So, my developmental goals or parameters are not evenly spread across my own country.

So, how can just by saying 7.5 per cent GDP growth, you are different from the rest of the LDCs. I am certainly not a LDC, I agree, but from among the emerging economies, I cannot be removed just because I am growing at 7.5 per cent. So, that differentiated treatment I reject.

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Published on December 13, 2015
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