Even as the WTO [World Trade Organization] members are currently engaged in thrashing out a work program for the 10th Ministerial at Nairobi [Kenya] in December, 2015, India is concerned over the delay in reaching a ‘permanent solution’ to the problem of dealing with food procurement subsidies. Its worry stems from the fact that the developed countries [primarily USA and EU] could use it as a bargaining chip for extracting concessions in other areas such as industrial goods and services. What are food procurement subsidies? What is the genesis of problem associated with these subsidies? What permanent solution India [and other developing countries] have been looking for? What consequences will follow if the solution is delayed? What should be the...
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Category: WTO agreements
WTO GAME IS NOT OVER YET
By getting the US to extend the peace clause, India has scored a win on the farm subsidy issue. But to secure interests in the long term, it must insist that the minimum support price it offers to farmers be excluded from subsidy calculations India had faced all-round flak for its stance at the World Trade Organisation’s General Council meeting, in Geneva on July 31, that linked approval of the Trade Facilitation Agreement with time-bound actions to address the concerns of developing countries with regards to food grain stockpiling. In December 2013, India was accused of going back on the Bali ministerial declaration and creating obstacles in the progress of the Doha round talks. Some developed countries were even willing...
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Indo-US accord on food security – where is ‘permanent’ solution?
India had faced all round flak for its stance in meeting of WTO General Council, Geneva (July 31, 2014) that linked approval of Trade Facilitation Agreement (TFA) with time bound actions to address concerns of developing countries in regard to support to resource poor farmers for food security. It was accused of allegedly going back on declaration at Bali ministerial in December, 2013 and stampeding progress of work under the Doha Round. Some developed countries were even willing to move forward – without India – to seal the deal on TFA leaving food security issue in the lurch. Now, USA not only appears to have made a climb down, but also applauded constructive role played by our leadership in ending...
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Modi fixing the WTO (Bali) ministerial goof-up
India is facing all round flak for its decision to oppose approval of Trade Facilitation Agreement (TFA) in meeting of WTO General Council (July 24/25, 2014) unless firm and time bound actions are taken to address concerns of developing countries in regard to support to resource poor farmers for food security. A pure technical view of the decisions taken at the 9th WTO ministerial held in Bali (December, 2013) would prima facie seem to suggest that India is at fault. In that meeting, group of developing countries or G-33 had agreed to the so called ‘Peace clause’ [a euphemism for not taking any penal action for violating commitments under Agreement on Agriculture (AoA) )] but with the caveat that this...
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India’s case at WTO may fail to sail
Even as India rejects the US contention of failing to protect IP rights, passing the TRIPS test might be tough In the recently released Special 301 report on trade and industry practices, the US Trade Representative (USTR) has stopped short of putting India on its Priority Foreign Country (PFC) list. Under Special 301, USTR tracks the intellectual property (IP) rights record of countries and lists them according to the strength of their IP environment. If, on review, it identifies substantial deterioration in any country’s IP regime, it gets downgraded to PFC status which carries with it trade and economic sanctions. India may have escaped being listed as such for now, but the Damocles sword hangs over the country as the...
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Is India’s intellectual property (IP) regime WTO compliant?
In the just released Special 301 report on trade and industry practices,the US Trade Representative (USTR) has stopped short of downgrading India to ‘Priority Foreign Country’ (PFC) list. Under Special 301, USTR tracks intellectual property (IP) rights record of countries and lists countries that could face trade sanctions and other countries whose IPR regimes are deemed to be areas of lesser concern. If on review, it identifies substantial deterioration in its IP regime, the country gets downgraded to PFC status. India may have escaped it for now, but ‘damocles sword’ hangs as USTR intends to conduct what it calls ‘out-of-cycle’ reviews to promote engagements on IPR challenges with India. Describing as unilateral probe under US law which India has not...
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No reason to fear WTO on farm subsidy
Commerce Minister Anand Sharma managed to wrest some elbow room for India’s food subsidy programme, bringing around the US and other developed countries to accept his point of view. The agreement finalised at the Ninth WTO Ministerial in Bali is expected to let the ‘peace clause’ — a euphemism for not taking any action for supposedly violating commitments under the Agreement on Agriculture (AoA) — continue till a permanent solution comes into being. Developed countries (DCs) wanted this window to be only for four years, without even drawing a time line for a lasting solution. They were merely willing to discuss it at the next Ministerial in 2017. Sharma exudes confidence that subsidy under Food Security Act (FSA) is now...
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Why beg at Bali?
The Indian delegation, led by commerce minister Anand Sharma, is approaching the WTO Ministerial in Bali with a ‘begging bowl’. The government has agreed to the so-called ‘peace clause’—a euphemism for not taking any penal action for violating commitments under Agreement on Agriculture (AoA)—proposed by WTO Director General but with the caveat that this will remain in place until a permanent relief is granted. India’s concurrence with the ‘peace clause’ proposal of DG tantamounts to conceding that India has committed a violation but would want WTO to alter rules to allow developing countries to maintain agricultural subsidies in excess of 10% of agricultural GDP. This has catapulted developed countries to a position from where they resort to aggressive posturing. They...
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Why genuflect before WTO?
India is making a big mistake. It is asking the WTO to be flexible about farm subsidy thresholds in view of its commitments under the Food Security Act (FSA), when, in fact, it has no reason to be on the defensive. The commitments under the FSA, humongous as they are, cannot be included under ‘trade-distorting food subsidy’ as defined by the WTO. The government should do its homework, before seeking favours it does not need. To be sure, the FSA — enacted in the monsoon session of Parliament — will entail a subsidy outgo of Rs 6,80,000 crore over a period of three years, as per the Commission for Agricultural Costs and Prices (CACP) or Rs 2,27,000 crore per annum....
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Stand firm on farm subsidies
In the run-up to the WTO ministerial meeting at Bali on December 3-4, the G33 developing countries, led by India, have sought ‘flexibility to continue helping poor farmers through support prices without a limit on subsidy’. The US promptly rejected it on the grounds that this will be tantamount to altering the rules of the game. Pascal Lamy, former WTO director general, promptly echoed the US stance. However, the rejection is without basis. Under the Agreement on Agriculture (AoA) 1995, support to poor farmers was excluded from the calculation of the aggregate measurement of support (AMS) and the decisions regarding subsidy reduction commitments with reference to the 1986-94 Uruguay Round. The reason for this exclusion was that support to poor...
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