There is trouble brewing for India at World Trade Organisation (WTO) – the multilateral body which binds member countries to a common set of rules with regard to trade in goods and services with ‘fairness’ and ‘non-discrimination’ as its underlying principles. To get a sense of where it is heading, let us put things in perspective. In May, 2018, in a hard hitting submission made to WTO Committee on Agriculture (CoA), the United States had lambasted India for indulging in substantial under-reporting of its market price support (MPS) programme for wheat and paddy farmers alleging that the sops given by government far exceed the permissible limit. This was a counter to the latter’s notification to WTO in March, 2018. Under...
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Category: Agricultural Subsidies in developed countries
What if, India loses ‘developing’ tag at WTO
With elections underway, even as different political parties compete with each other to promise more subsidies, there is trouble brewing for India at World Trade Organization [WTO] – the multilateral body which binds member countries to a common set of rules with regard to trade in goods and services with ‘fairness’ and ‘non-discrimination’ as the underlying principles. In May, 2018, in a hard hitting submission made to WTO Committee on Agriculture [CoA], the United States had lambasted India for indulging in substantial under-reporting of its market price support [MPS] program for wheat and paddy farmers alleging that the sops given by government far exceed the permissible limit. This was a counter to the latter’s notification to WTO in March, 2018....
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Trump is hell-bent on decimating WTO
Ever since Donald Trump took charge as US President, he has made systematic efforts to demolish the very foundation of the World Trade Organisation (WTO) which is at the centre of ‘free’ and ‘fair’ trade based on transparent and non-discriminatory rules. At the 11th WTO ministerial conference held in Buenos Aires in December 2017, the US rejected the demand of developing countries to find a “permanent solution” to stockholding for food security which was agreed to four years ago at the 9th ministerial in Bali. Worse, it has dumped the Doha Development Agenda (DDA), which has been assiduously pursued by all members of WTO since 2001. Second, in complete defiance of rules under WTO, it has hiked import duty on...
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Trump is hell-bent on decimating WTO
Ever since, Donald Trump took charge, he has made systematic efforts to demolish the very foundation of World Trade Organization [WTO] which is the epitome of ‘free’ and ‘fair’ trade based on transparent and non-discriminatory rules. At the 11th WTO ministerial conference held in Buenos Aires during December 10-13, 2017, the USA rejected the demand of developing countries for finding a ‘permanent solution’ to stockholding for food security which was agreed to four years ago in the 9th ministerial held in Bali. Still worse, it has dumped the Doha Development Agenda [DDA] which has been assiduously pursued by all members of WTO ever since 2001. Second, in complete defiance of rules under WTO, it has hiked import duty on steel...
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Farm subsidies – India needs to rework strategy at WTO
In a hard hitting submission made to the WTO [World Trade Organization] Committee on Agriculture [CoA], the United States has castigated India for indulging in substantial under-reporting of its market price support [MPS] program for wheat and paddy farmers alleging that the sops given by the government far exceed the permissible limit. Under the Agreement on Agriculture [AoA], a developing member country cannot give aggregate measurement support [AMS] – WTO nomenclature for subsidies – in excess of 10% of the value of its agricultural production. The AMS includes ‘product-specific’ subsidies and ‘non-product specific’ viz. subsidies on agricultural inputs viz., fertilizers, seed, irrigation, electricity etc. The ‘product-specific’ subsidy is excess of minimum support price [MSP] paid to farmers over the external...
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Rule based global trade – are there any takers?
The 11th WTO [World Trade Organization] ministerial conference held in Buenos Aires during December 10-13, 2017 had ended up in a fiasco as there was not even a customary declaration not to talk of specific mandate/work program to take things forward. Meanwhile, Indian commerce minister, Suresh Prabhu held an informal meeting of the members of the WTO in New Delhi on March 19-20, 2018 [delegates from as many as 52 countries, including the US and China participated] to “find ways to identify common ground for strengthening and re-invigorating the Organization”. Even as these efforts go on to ensure that WTO stays relevant, Donald Trump is leaving no stone un-turned in demolishing the very foundation of this multilateral body. In Buenos Aires,...
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Public stockholding – is it end of the road for ‘permanent solution’?
The 11th WTO [World Trade Organization] ministerial which started on December 10, 2017 in Buenos Aires with pomp and show has ended in whimper. After four days of marathon deliberations [in the plenary, group meetings and bilateral], even the efforts by director general, Roberto Azevedo to draft a declaration – a bare minimum for any such conference – did not bear fruit. The main reason for the failure was diametrically opposite stance taken by USA and India. While, the latter pressed for the most contentious issue under the Doha Development Round [DDR] viz. finding a permanent solution for public stockholding programs for food security, the former did not even allow it to be put on the table [earlier in November...
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India’s stance on food security at WTO – Prabhu does a volte face
The union minister of commerce and industry, Suresh Prabhu has stated that “he won’t take up the issue of finding a permanent solution for public stock-holding programs for food security at the upcoming WTO ministerial in Buenos Aires next month”. This should be music to the ears of developed countries particularly USA, EU, Canada, Australia and Japan as this was a major item on the agenda of the Doha Development Round [DDR] – started in 2001- which they are hell bent on dumping. In fact, during a meeting at WTO, Geneva [July, 2017], they had rejected a proposal submitted by G-33 Group of developing countries [with India in the lead] on (i) public stock-holding for food security; (ii) special safeguard mechanism [SSM]...
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11th WTO ministerial – India must not play defensive
In the run up to the upcoming WTO ministerial in Buenos Aires [December, 2017], ex-commerce minister, Nirmala Sitharaman has once again reiterated India’s resolve to seek a permanent solution for public stockholding programs for food security besides taking up two other proposals viz. special safeguard mechanism [SSM] against sudden surge in imports of agricultural products and movement of short-term services providers. But, India is up against heavy odds as during her recent visit to WTO, Geneva [July, 2017] , US, EU, Canada, Australia and Japan had rejected a proposal submitted by G-33 Group of developing countries in this regard. At the same time, developed countries wanted to bring to the table issues such as e-commerce and disciplines for micro, small,...
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STANDING FIRM ON FOOD SUBSIDIES
With India-China having jointly petitioned WTO, it is expected that both will reach at a permanent solution to address anomalies surrounding food procurement In a joint paper submitted to the World Trade Organisation (WTO) committee on agriculture on July 17, India and China lambasted the developed countries, including the United States, the European Union and Canada for consistently giving trade-distorting subsidies to their farmers at levels much higher than the ceiling applicable to developing countries with respect to such subsidies. According to the paper, “Developed countries corner more than 90 per cent of global Aggregate Measurement of Support (AMS) — a technical jargon for trade-distorting subsidies — entitlements amounting to nearly $160 billion, which is beyond their de minimis (maximum permissible level of AMS)....
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