WTO’s trade facilitation agenda hits food security hurdle

04 Dec 2013


The ninth ministerial meeting of the World Trade Organisation (WTO), currently underway in Bali, Indonesia, looked destined to fail as India and other developing countries stuck to their stand on agriculture while the developed world continue to harp on trade facilitation measures as key to the success of the Doha development round.

India today told WTO members that the issue of food security to the poor is "non-negotiable" for New Delhi.

Addressing the plenary session of the ninth WTO ministerial conference in Bali, India's minister of commerce and industry Anand Sharma said the Bali negotiations should address historical imbalances and that the final package must be substantive, so as to ensure a rule-based, fair and equitable world trade order.

Sharma categorically stated that the outcome of the 9th ministerial conference ''is the collective responsibility of the entire WTO membership, and a fair, balanced result would be possible only if the genuine concerns of developing countries, including India, are satisfactorily addressed.

"Agriculture sustains millions of subsistence farmers. Their interests must be secured. Food security is essential for over four billion people of the world. For India, food security is non-negotiable. Need of public stock-holding of foodgrains to ensure food security must be respected. Dated WTO rules need to be corrected," he said.

The G-33, grouping of 46-member developing nations, including India, China and Indonesia, has sought amendments to the WTO Agreement on Agriculture, so as to facilitate state procurement of foodgrains at minimum support prices to farmers and selling them to the poor at subsidised prices through the public distribution system.

This, however, would require the country to keep a foodgrain buffer stock of around 62 million tonnes a year for providing some 820 million people with a minimum 5 kg of foodgrains each at Rs1-3 per kg.

"A trade agreement must be in harmony with our shared commitments of eliminating hunger and ensuring the right to food. These are an integral part of the Millennium Development Goals," he added.

He said the due restraint provision in its current form cannot be accepted and it must remain in force till "we reach a negotiated permanent solution".

The G-33 proposal on food security aimed at addressing the problems faced by developing countries due to outdated WTO rules which base agriculture subsidy calculation on external reference prices of 1986-88, even as global food prices have increased manifold during this period.

On the trade facilitation agreement (TFA), Sharma has clearly said that although India has remained constructively engaged, "yet, a few contentious issues remain" and "we consider it premature to lend support to an inconclusive TFA".

India's stand could be seen as a major blow to the Bali meeting as several WTO members are pitching for a positive outcome.

Brazil trade minister Luiz Alberto Figueiredo Machado too said that food security is an important element for developing countries.

"Since agriculture is where we find maximum distortions. I must emphasise the central importance of agriculture," Machado said.

On TFA, he said its implementation would depend on substantial financial support to least developed countries.

Mexico also talked about the importance of food security.

Chinese trade minister Huchang Gao said the multilateral system is facing challenges. "Confidence, commitment and changes are important for the deal," he said.

EU Trade Commissioner Karl De Gucht said, "Fate of the entire WTO is at stake...We have come too far to fail."

US Trade Representative Michael Froman said the Bali deal is close and no country has received all its demands.

"US has negotiated hard but we have shown flexibility... this is not we have expected...Let us not sugarcoat the failure; if it happens, the loss will be felt by those who could least afford it. We cannot take success for granted this time," he said.

The negotiations at Bali include:

  • Trade facilitation: cutting red tape and streamlining customs and port procedures;
  • Agriculture: four issues out of a larger set negotiated in the Doha Round, including export subsidies, food stockpiling for food security in developing countries and a technical issue aimed at improving countries' ability to export through importing countries' quotas; and
  • Development: particularly least developed countries, monitoring special treatment given to developing countries in general, and cotton.
    WTO director-general Azevêdo said, ''A few, very limited, specific and localised issues'' remain unresolved from talks among ambassadors and officials in Geneva.

These obstacles ''require political calls to overcome - political calls of a nature that we simply cannot make in Geneva'', he told the ministers.

If WTO members fail to agree within the next few days - and ''it's now or never,'' he said - the loss would be more than the issues on the table themselves.

Sharma, however, said the issue to be addressed was not just food security, but inadequacies in the whole draft Bali proposals – whether on export competition, tariff rate quota (TRQ) administration, or trade facilitation, only lip service is paid to interests of developing countries in proposed texts, which are devoid of substance, and consist largely of best endeavor provisions.

Sharma underlined this point at a series of bilateral meetings with several of his counterparts attending the Bali ministerial meet.

He reiterated India's commitment to the strengthening and preservation of the multilateral trading system and take forward its agreed negotiating mandate.

A deal struck at the Bali ministerial conference would benefit a wide range of people, particularly the poor, while failure would weaken the multilateral trading system, which could also hurt the poor, speakers said at the opening session of the conference.

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