India wants the upcoming 12th Ministerial Conference in Geneva to take up ‘total exemption for support to public stockholding for food security’ In the run up to the 12thWorld Trade Organization (WTO) Ministerial Conference scheduled to be held from November 29, 2021, India has made two submissions. One, subsidies given for maintaining food security programs of developing countries should be allowed without any limit and two, member countries who give trade distorting farm subsidies in excess of $10 billion should eliminate them within three years. India runs a mammoth program of public stockholding for food security purposes. Under it, agencies of the Government like the Food Corporation of India (FCI) buy agri-produce such as wheat, rice/paddy, coarse cereals from farmers...
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Category: WTO agreements
Export subsidies face WTO challenge
The leeway to withdraw subsidies was meant for those developing nations which in 1995 had GNI in excess of $1,000 per capita. It can’t be availed by India, which is in a different category The Coronavirus pandemic played havoc with the economy of the country during the first half of last year. However, exports were beginning to look up in March — touching a record $34 billion which was higher than $33 billion in March 2019 — and signalling a sharp increase during the current fiscal. But now, the exporters face a triple whammy. First, they have not received export benefits worth approximately Rs 35,000 crore under the Merchandise Export from India Scheme (MEIS). Under the MEIS, which was withdrawn...
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Hobson’s choice on farm subsidies
The Government may consider DBT to farmers; India can give it without any cap and yet remain compliant with its commitment under the WTO At the Trade Policy Review (TPR) meeting held at the World Trade Organisation (WTO) in January, India insisted that a permanent solution for public stockholding to serve the food security objective special safeguard measures (SSMs) to prevent import surges and elimination of unfair farm subsidy entitlements of some members should be taken up on a priority basis for any farm deal that may be worked out at the 12th WTO Ministerial Conference (MC-12) scheduled to be held from November 29. For about two decades, India has been taking up at the WTO these core agriculture issues that are...
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Protecting agri-subsidies at WTO – ‘Hobson’s choice’
At the Trade Policy Review (TPR) meeting held at WTO (World Trade Organisation) in Geneva (January, 2021), the Indian delegation led by the commerce secretary, A Wadhawan insisted that (i) permanent solution for public stockholding to serve the food security objective; (ii) special safeguard measures (SSMs) to prevent import surges and (iii) elimination of unfair farm subsidy entitlements of some members should be taken up first on priority for any farm deal that may be worked out at the 12th WTO Ministerial Conference (MC 12) scheduled to be held from November 29, 2021. Ever since the launch of Doha Development Round (DDR) (2001) (as the title suggests, this was meant primarily to address the issues of concern to the developing...
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Trade policy – India needs to open up
In a report on developments in India’s trade policy on the occasion of the seventh Trade Policy Review of India during January 6 – 8, 2021, World Trade Organization (WTO) has noted “export restrictions and import prohibitions imposed by India seem to be in contradiction with its main trade policy goal, of increasing its share of global exports from 2% in 2015 to 3.5% by 2020”. Four areas which have come under WTO focus are (i) high import tariff and frequent changes thereof, minimum import prices and other import restrictions; (ii) export taxes, export restrictions/licensing; (iii) frequent use of anti-dumping measures; (iv) high subsidies and need to reduce these to free up resources for investment particularly in development of the infrastructure....
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An unreliable shield
Since the subsidy given to rice farmers has exceeded 10 per cent, India has violated its WTO commitment and invoked the ‘peace clause.’ But how much immunity will this give to it? In a notification submitted to the 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 — India has informed that the value of its rice production during 2018-19 marketing year was $43.67 billion and for that, it provided subsidies worth $5 billion. This works out to 11.4 per cent of the value of rice production. Under the Agreement on Agriculture (AoA) of the WTO, a...
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Peace Clause – unreliable shield against subsidy breach
In a notification submitted to the World Trade Organization [WTO] – the multilateral body which binds member countries to a common set of rules with regard to trade in goods and services with ‘fairness’ and ‘non-discrimination’ as its underlying principles – India has informed that the value of its rice production during 2018-19 marketing year was US$ 43.67 billion and for that it provided subsidies worth US$ 5 billion. This works out to 11.4% of the value of rice production. Under the Agreement on Agriculture [AoA] of the WTO, a developing country cannot give aggregate measurement support [AMS] – an acronym for subsidies in WTO parlance – in excess of 10% of the value of its agricultural production. The AMS...
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No big deal
Staying clear of the optics and bonhomie on display all through the US President’s recent visit to India , one gets a sense that the road to even a limited trade deal is thorny Prior to the maiden visit of US President Donald Trump to India, there was a sense of dejection about the possibility of the US and India signing even a limited trade deal, leave aside a major one. This is to be seen in the backdrop of the absence of United States Trade Representative (USTR) Robert Lighthizer from the delegation. Earlier, too, Lighthizer had cancelled a visit to New Delhi when he was scheduled to wrap up discussions on a trade agreement. However, the mood was buoyant at the...
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Trade deal – forget big, even mini unlikely
Prior to the maiden visit of President, Donald Trump to India [February 24 – 25, 2020], there was a sense of dejection about the possibility of US and India signing even a limited trade deal not to talk of a ‘big deal’. This is to be seen in the backdrop of the United States Trade Representative [USTR], Robert Lighthizer [the point man who has the onerous responsibility of formulating US trade policy and negotiating trade pacts with countries world-wide] not being part of the delegation. Earlier, Lighthizer had cancelled a visit to New Delhi when he was scheduled to wrap up discussion on a trade deal. However, on conclusion of the visit, the mood is buoyant. This was reflected in...
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Shed the protectionist mindset
Keeping in mind the criticality of being an integral part of the global supply chain to achieve a $5 trillion economy, India needs to reconsider its decision on RCEP The Regional Comprehensive Economic Partnership (RCEP) is a conglomeration of 10 members of the Association of South East Asian Nations (ASEAN) viz. Malaysia, Indonesia, Thailand, Vietnam, Singapore, The Philippines, Myanmar, Brunei, Laos and Cambodia plus six others viz. Australia, New Zealand, Japan, South Korea, China and India. If it really sees the light of day with all 16 members intact, the group will cover 3.6 billion people or almost 50 per cent of the world’s population and account for nearly 40 per cent of the global GDP (Gross Domestic Product). India is...
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