WTO ministerial begins with moderate hope of outcome

The 11th ministerial meeting of the 164-member WTO has begun amid only moderate hopes of an outcome as developed and developing nations braced up to push their agendas at the highest policy making body of the World Trade Organization.

India is being represented at the meeting, which began on Sunday, by Commerce and Industry Minister Suresh Prabhu who will be pushing for a permanent solution to the public food stock-holding issue which is crucial for operating the food security programme.

During the course of the four-day deliberations, the developing nations will resist the efforts by the developed nations to formally set aside the Doha Development Agenda (DDA) and place new issues including e-commerce on the negotiating table.

According to officials, with different interest groups taking tough positions on crucial issues, one could expect only moderate outcome from the WTO’s 11th Ministerial meeting.

Prabhu has intensified his consultations and bilateral meetings to muster support for issues like public stock-holding and Special Safeguard Mechanism (SSM), which are crucial for India. The minister had met the representatives of European Union, his South African counterpart and participated in the meetings of the South Centre and the G33 grouping.

“Met with the EU and had bilateral meetings (with trade ministers of other countries)...so that we have a common platform. So when we finally push our agenda there is enough support for us,” Prabhu told reporters here.

outcomes expected

According to Stephen Ndung’u Karau, chair, Agriculture Committee, some outcome is expected on the public food stock-holding besides a few other agriculture issues. As regards SSM, Karau said, “Several members want an outcome...but more likely outcome may be a work programme.”

He said that the outcome is likely to be on issues concerning domestic support, export restrictions and cotton. He also said that other issues like export competition, sanitary and phytosanitary (SPS) and market access may have work programmes.

Edwin Kessie, Director, Agriculture Division said that “even if we don’t get a solution, Peace Clause will continue”.

India is keen for a permanent solution to the public stock-holding issue at the ministerial, the highest policy making body of the WTO and wants that the solution should be better than the Peace Clause.

Peace Clause and solutions

Under the global trade norms, a WTO member country’s food subsidy bill should not breach the limit of 10 per cent of the value of production based on the reference price of 1986–88. Apprehending that full implementation of food security programme may result in breach of the WTO cap, India has been seeking amendments in the formula to calculate the food subsidy cap.

As an interim measure, the WTO members at the Bali ministerial meeting in December 2013 had agreed to put in place a mechanism popularly called the ‘Peace Clause’ and committed to negotiate an agreement for that at the 11th ministerial meeting, which is underway at Buenos Aires.

Under the Peace Clause, WTO members agreed to refrain from challenging any breach in the prescribed ceiling by a developing nation at the dispute settlement forum of the WTO. This clause will be there till a permanent solution is found to the food stockpiling issue.

As regards SSM, it is an instrument which would help developing countries to deal with import surges and price dips as a result of high subsidies provided by the developed countries to agriculture products. An agreement on SSM is important for India as the applied customs duty on some of the agriculture products is at the bound rate, meaning it can’t be raised further. These include products such as chicken legs, apples, olive oils and rice.

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