More reports on: Trade

India withstands WTO pressure over issue of food stockpiling

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05 November 2014

India is holding on to its stated position over developing and poor countries' right for stockpiling and redistribution of food amidst attempts by a group of countries to bring discord to the India-led group and show their demands as attempts to stall progress towards a global trade agreement.

India refused to bow to calls to scale back a scheme to buy wheat and rice that it distributes to 850 million poor people. Critics say the food stockpiling amounts to paying farmers to produce food, which is likely to lead to food surpluses that will get dumped on world markets. New Delhi, however, refused to budge.

"India's position on trade facilitation has been completely misunderstood because of unreasonable positioning by some of the developed countries," finance minister Arun Jaitley told a World Economic Forum conference in New Delhi.

Jaitley repudiated suggestions that India was fundamentally opposed to trade facilitation, which would entail easing port and customs procedures and, by some estimates, add $1 trillion and 21 million jobs to the global economy.

India, however, has begun backroom efforts to break the deadlock, sending a top trade ministry official to Geneva this week for talks with key WTO members.

WTO does not have any effective means to bring pressure to bear against India, Asia's third-largest economy, which is home to a sixth of the world's population

WTO director-general Roberto AzevÍdo, meanwhile, pointed to a joint statement issued at the conclusion of a United Nations conference on landlocked developing countries which underlined the importance of the trade facilitation agreement in helping reduce trade costs.

The so called `Vienna Programme of Action', adopted at the end of the Second UN Conference on Landlocked Developing Countries (LLDCs) includes trade and trade facilitation as one of its six priorities.

It claims that the agreement on trade facilitation and its timely implementation are important for facilitating trade for landlocked developing countries as the agreement includes important provisions on technical assistance and capacity-building to help landlocked developing countries to implement it effectively.

India wants to keep a so-called 'peace clause' that protects its huge state food purchases until the WTO can strike a definitive deal on stockpiling. As originally envisaged in Bali, the clause would expire in four years.





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