Comments
The US has rejected India’s proposal to the WTO seeking flexibility to continue helping poor farmers through support prices without a limit on the subsidy. The US says this would amount to re-writing trade rules.
The outright rejection of one of the two key issues in the limited agenda for the World Trade Organisation’s next ministerial meeting at Bali in December puts a question mark on its fate.
“It will essentially blow up one of the main disciplines we have from the Uruguay Round. And for us that is a price too high,” said US Permanent Representative to the WTO Michael Punke, addressing a select group of journalists.
With the ongoing decade-old Doha Development Round not producing any result, trade ministers are working towards building consensus on a small set of issues in Bali to signal that the comatose Round is not dead.
Key proposal
One of the main proposals is from the G-33 developing countries, led by India. It suggests that acquisition of food stocks by developing country members with the objective of supporting low-income or resource-poor farmers should not be considered trade-distorting.
The group said that such action should not be part of the aggregate measurement of support that is subject to certain disciplines, failing which penalties are imposed.
Since food prices, and therefore minimum support prices, are going up steadily, it is important that India is allowed to continue giving this subsidy so that poor farmers can be helped. There is now a limit on the so-called trade-distorting subsidies. If the limit is lifted, India cannot be dragged into a dispute if it breaches this cap.
The US has said a categorical no to this. “We are very willing to talk to India about ways it can address problems it has identified. What we can’t do as part of the discussion is go against disciplines that have been put in place at the end of the last multilateral round. That is one of the important things we are discussing in Geneva. As to how to address this issue that has been raised by India,” Punke said.
But India and the G-33 are not willing to give up. “We should not be subjected to measures drafted in the Uruguay Round to check developed countries in the EU from increasing their subsidies. The minimum limit that we are allowed as subsidies has to be raised,” a Government official told Business Line .
Trade facilitation
The G-33 has linked the acceptance of its demand on subsidies to the larger agenda of trade facilitation being pushed by developed countries to streamline movement of goods at ports with least cost and delay.
“Trade facilitation would essentially help the developed countries as we already benefit from the high quality infrastructure that they have. We have to get something in agriculture to agree to binding commitments in trade facilitation,” the official said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.