More reports on: World Trade Organisation, World economy

India not to back WTO's trade protocol sans food security

24 July 2014

India has made it clear that it will not allow developed countries to push through a trade protocol unless the World Trade Organisation delinks food security programmes from the trade facilitation agreement or finds a permanent solution to the dispute over the issue of food security.

A group of developed countries say the Bali deal could add $1 trillion to global GDP and 21 million jobs, but India and other developing and poor countries are not impressed as the proponents of the Trade Facilitation Agreement fail to address their concerns over food security.

The Trade Facilitation Agreement (TFA) faces a 31 July deadline by when all the 160 WTO member countries must ratify the agreement into a protocol, facilitating implementation of the first phase of the deal from 2015.

The trade facilitation agreement, however, is against public holding of food stock and its subsidised distribution to the poor as it would impinge on marketing prospects for the developed agricultural economies.

As an interim measure, to push through the TFA, developed economies led by the United States stuck a deal in Bali in December, offering protection to countries like India from WTO disputes for non-compliance in respect of public stockholding of food. This protection would be available till 2017, by which time a permanent solution has to be found.

The deal, however, does not provide for an option in case WTO members fail to agree on a permanent solution to the food security issue. In such a scenario, India and other developing countries will be stuck with the problem of ensuring food security to their poor.

India's decision to seek a solution to the food security issue ahead of formalizing the TFA is seen by western diplomats as ''suicidal'' as the developed countries want to give precedence for trade protocol over food security.

Earlier this month, commerce minister Nirmala Sitharaman had criticized the WTO for casting aside the food security issue that concerns the poor and had indicated that India would not back the TFA protocol which undermines its food security concerns.

She said India was unhappy with the progress of talks on food security that ministers also committed to in Bali.

In their urge to finalise the TFA, the developed countries are leaving little negotiating space for public stockholding of food grains and food subsidies to the poor and the half-deal stuck in Bali could fizzle out if a permanent solution to the controversy is not found by 2017.

The current WTO norms limit the value of food subsidies at 10 per cent of the value of foodgrain production. However, the support is calculated on prices that are over two decades old and not at the current levels.

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