More reports on: World Trade Organisation

WTO text on agriculture drafted to favour developed countries: India

17 December 2015

India has taken objection to a new draft text on agriculture that is solely focused on the interests of the developed countries and ignores the concerns of the developing and least-developed countries.

Minister of state for commerce and industry Nirmala Sitharaman told an open-ended agriculture meeting at the 10th Ministerial Conference of WTO in Nairobi, Kenya, that the draft, with its focus on elimination of export subsidies on farm goods and phasing out government support for marketing and transport of agricultural products, was heavily loaded against developing and least-developed countries.

India is also not satisfied with the text on fisheries trade that proposes punitive action for unauthorised fishing a term that can be misused by importers and with which many developing countries are not comfortable.

The proposal can be dated back to 2008, when a tentative agreement was reached on the proposal, although many did not consider it.

Clearly, the draft, which is largely focused on an agreement on elimination of export subsidies on farm goods and phasing out government support for marketing and transport of agricultural products, is particularly against the country's interests.

While the details of the 12-page text on export competition, dealing with subsidies and government support set out clear timelines, it clearly avoids farm subsidies that make farm goods from the developed countries competitive.

India's key interest on a special safeguard mechanism for developing countries to deal with import surges was largely absent, with the text only saying that the issue would be "pursued" in the context of "agricultural market access". In other words, it would be decided when WTO members decide on duty cuts for farm goods, something that is not being discussed at the moment.

We support a balanced outcome in agriculture, Sitaraman said, adding that it should include all elements that make agricultural production and its trade competitive.

Export competition is one of the pillars of agriculture negotiations and these negotiations are finely balanced on these three pillars. Taking out one pillar will disturb the balance, she pointed out.

In the run up to Bali Ministerial, the G-20, including India, had tabled a proposal on export competition. But there could not be a binding outcome since many of the members, including some of the members who are now proposing to harvest this pillar, raised the same issue of balance in agriculture negotiations.

Now the efforts are to cherry pick issues from within the export competition pillar and further to dilute the provisions to suit a few members, she said.

''At this late hour new definitions and language are being proposed. It is not possible to react to these new concepts without extensive domestic consultations. Further, these new concepts are being discussed in a limited group of members. This severely impacts the transparency of the process,'' Sitaraman pointed out.

The Special Safeguard Mechanism is important for developing countries to address import surges and price dips due to heavily subsidised imports of agricultural products from developed countries. ''All we are seeking now is an instrument that has been available to a select few for over two decades. This demand is reasonable and pragmatic,'' she said.

A simplified offer of the G-33 proposal on SSM has already been submitted as far back as 1 May, she said, adding the Chair to speedily work on this.

''We expect the membership to engage constructively on the issue so that we can arrive at an outcome in Nairobi.

The WTO draft text on agriculture was biased in favour of the US and developed countries, civil society groups said.

"It is the usual pressure tactics. You give the extreme position and then start negotiations," said a negotiator.

Civil society groups were also critical of the fact that the text was biased in favour of the US and developed countries. While the subsidies part was "no big deal", the part on export credit was tilted towards US with a much longer loan repayment period proposed than what was agreed earlier, they said.

There was, however, recognition of a need to work out a permanent solution on procurement for PDS - another demand from India - but no timelines were given. It was noted clearly that the peace clause would continue till a permanent solution was found, preventing any country from raising a dispute at WTO even if the subsidy cap was breached.

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