WTO: Bali bash set for a crash as India sticks to guns on food stockpiling

Written by Surabhi Rastogi | Surabhi | Bali | Updated: Dec 5 2013, 14:18pm hrs
Anand SharmaCommerce Minister Anand Sharma talks with Canada's Minister of International Trade Ed Fast during the 9th Ministerial Conference of the WTO in Bali, Indonesia. (AP)
Clouding the chances of a consensus on even the limited agenda of the World Trade Organisations Bali ministerial, India, concerned that its food security law could be hamstrung by the extant norm that developing countries' price-support-based food subsidy must not cross 10% of the value of farm output, toughened its stance on Wednesday.

While commerce and industry minister Anand Sharma claimed the country was not isolated on concerns over food security, highly-placed sources here said as many as 18 countries supported New Delhis position that the asymmetry in the Agreement on Agriculture should be corrected and in the interim, developing countries ought to have immunity from penalties.

But sources indicated that there was disagreement within the G-33 as well with prominent members including Brazil and Indonesia wanting to reach a consensus on the proposed Bali package over the next few days.

We have some principles and convictions. We don't compromise on that, Sharma said after a specially-convened meeting of trade ministers by WTO director general Roberto Azevedo.

If we (India) do not agree, the deal will not go through, said an official source.

Earlier in the day, while addressing the plenary session of the WTO, Sharma had made it clear that Indias position on food security was non-negotiable even as others including the US, China and the EU said its a now-or-never moment for the WTO and sought to arrive at a consensus on the Bali package.

Historical imbalances in trade rules must be corrected to ensure a rule-based, fair and equitable order, Sharma said, adding the trade facilitation deal would also not get support. We consider it premature to lend support to an inconclusive trade facilitation agreement. He also made it clear that the proposed peace clause of four years was not acceptable. It must remain in force till we are able to agree on a lasting solution and provide adequate protection from all kinds of challenge, the minister said.

Qatar too wanted a review of the proposed deal at Bali, while G-33 members Brazil and Mexico raised concerns on agriculture issues but hedged it saying it was essential to reach a consensus.

Reaching agreement on agriculture proposals is a necessary part of any early harvest. Food security is also an important part of our discussions, Brazils foreign minister Luiz Alberto Figueiredo Machado said, still hoping for a consensus.

Sharma in his three-minute speech did not mince words and it seemed that a consensus without some compromise would be difficult. Highlighting the condition of subsistence farmers, he said trade agreement must be in harmony with shared commitments of eliminating hunger and ensuring the right to food.

Later in the evening, Sharma had another meeting with WTO director general Roberto Azevedo and Indonesian trade minister Gita Wirjawan to try to break the stalemate. Azevedo is expected to hold similar meetings with other dissenting nations over the next few days.

Most countries seemed keen to go ahead with the Bali package as it would restore the credibility of the WTO and take forward the stalled Doha Round of trade talks. Even the WTO chair Indonesia is understood to have softened its stance as it is hosting the talks and is keen to reach an outcome. But with the US and EU continuing with their stance, talks of a consensus at Bali seemed distant.

Chinas minister for commerce urged member nations for an early harvest and said, confidence, commitment and change are essential for the deal. He also announced that China would increase imports to $10 trillion over the next few years.

The US too underlined that no country has got all it wanted and even the US has made its fair share of compromise. EU trade commissioner Karel De Gucht said that both metaphorically and physically, we have come too far to fail. In a press briefing, Gucht said: India has to show flexibility. If each one sticks to its own solution, then there will be no agreement, even if a permanent solution is not possible in Bali.

Developing countries, with limited financial means, are unable to use the provision on direct food aid. India, for instance, acquire food products at minimum support prices to farmers, hold the stocks and release it at administered prices to the target population. Under the AoA, the acquisition price (MSP) has to remain below the external reference price (ERP) determined on the basis of prices prevailing during 1986-88. The difference between the acquisition price (the applied administered price) in a particular year multiplied by the quantity acquired counts towards the Amber Box of trade-distorting subsidies which are capped at 10% of value of production. New Delhi's concern is if this ceiling is not raised, then, at its present level and given the food security law, India may cross the same in 3-4 years.