At WTO, India opposes Canada’s proposal of prior notice for tariff changes in farm products

Amiti Sen New Delhi | Updated on September 28, 2020

New Delhi has insisted on a permanent solution allowing flexibilities for public stockholding programmes for food security purposes

Says it could lead to hoarding, price arbitrage and fraudulent transactions

India has opposed a proposal made by Canada, Brazil and Australia at the World Trade Organization requiring all members to give prior notice for tariff changes on agriculture products to increase transparency and predictability in applied tariffs. New Delhi has argued that the option could lead to hoarding and other market disruptions, a Geneva-based official said.

At the WTO’s Committee on Agriculture in Geneva recently to set an agenda for the next Ministerial Conference (MC12) of the body tentatively scheduled in 2021, India also insisted that there has to be an outcome at the Ministerial on a permanent solution allowing flexibilities for public stockholding programmes (most importantly its MSP programme for key crops) for food security purposes.

Canada, speaking on behalf of Australia and Brazil, laid down suggestions to address problems faced by countries due to sudden increases in applied tariffs by members, which create uncertainty for exporters. One of the options suggested by it to enhance predictability in applied tariffs is to provide a public notice in advance of a change in applied tariffs, the official said.

Best practices

“Members could also develop best practices for customs authorities to facilitate the development of mechanisms, such as en route provisions or the ability to pre-pay customs duties, which could be implemented domestically by members,” Canada’s proposal added.

Brazil and Australia, the co-sponsors of Canada’s paper, expressed full support and Brazil added that trade in fruit and other fresh produce would particularly benefit by the proposal.

The US, Argentina, Ukraine, New Zealand and Uruguay also expressed support for Canada’s proposal as well as a similar submission from Russia.

India, South Africa and Egypt, on the other hand, opposed the proposal on the ground that it could impose additional burdens on administrations already under stress and would also restrict policy space, the official pointed out.

“New Delhi further said that the option requiring prior notice of tariff changes could encourage hoarding, price arbitrage and fraudulent transactions,” the official said adding that China said it shared some of the concerns expressed.

The European Union and Russia expressed their support for further exchanges on the submission.

Food security

On food security, India said it was critical to have an outcome at MC-12 on a permanent solution allowing flexibilities for public stockholding programmes for food security purposes. India has already breached the ceiling for its MSP support for rice and has invoked the ‘peace clause’ agreed to at the WTO’s Bali Ministerial meet to ward off challenges. However, since the ‘peace clause’ comes with a lot of conditions, India still faces the threat of action at the WTO for breaching subsidy limits and wants a permanent solution to the problem. Indonesia also stressed the importance of addressing the food security concerns of many members.

Published on September 28, 2020

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