there is a demand on emerging economies like India to reduce tariffs. Currently, the bound tariffs (the extent to which it can be raised) maintained by India is the highest in the case of oilseeds at 300% and the highest applied (real) tariff is 80% in case of wheat. Reduction of these tariffs is linked to subsidy reduction by the developed world.
In order to qualify, green box subsidies must not distort trade or at most cause minimal distortion. They have to be government-funded (not by charging consumers higher prices) and must not involve price support. Hence, green box subsidies are allowed without limits, provided they comply with the policy-specific criteria. The green box is defined in Annex 2 of the Agriculture Agreement.
At present, there is ambiguity on including India’s food subsidy programme in the green or amber box and the country is seeking legal certainty on the same.
“India is trying to draw the attention back to its core interest and this has been a part of the modalities on the negotiating table for almost five years. India's proposal is not out of the hat,” said Abhijit Das, head and professor, centre for WTO Studies, Indian Institute of Foreign Trade.
The National Food Security Bill, 2011, which makes the right to food a legal right, is currently pending in Parliament. It seeks to deliver food security by providing specific entitlements through the targeted public distribution system.
“If this is accepted, then the WTO rules will not put fetters around India. Besides, it is an attempt to see if there a consensus can be built on some issues before the Bali ministerial,” said an analyst requesting anonymity.
Some WTO members are looking at carving out pacts in select areas during the Bali ministerial conference.
Developed countries including the US want India and other emerging economies to be part of the four major sectoral pacts — trade facilitation (TF), IT, environmental goods and international services agreement. On these four matters, developed nations want to go plurilateral, that is, the trade benefits arising out of such an agreement will be shared only by signatories.