Fineprint on food security law must for pact at WTO

India will have to furnish details about its ambitious food subsidy programme and how it plans to balance it with the export of foodgrains if it wants an agreement in the Bali ministerial in December.

According to officials, developed countries have sought details about the National Food Security Ordinance and its impact on India?s stock requirement even as the French think-tank CIRAD has favoured India and argued for the need to correct WTO rules for public stocks else it will lead to unfairness and bad incentives.

?It should not be a problem for India to give these details as the agreement will be based on these. The developed countries want to know the modalities of the scheme and if it will impact exports and how the balance between the piled-up stock, exports and subsidies is to be maintained,? said an official.

India on its part said that some the subsidies that are given as part of the procurement for public stockholding from poor and marginal farmers should not be regarded as a ?prohibited subsidy? or ?amber box? subsidy by the WTO. Presently, these are prohibited under WTO norms.

In WTO terminology, subsidies are identified by ?boxes? that are given the colours of traffic lights: green (permitted), amber (slow down or to be reduced) and red (forbidden).

?Ironically, the US? food stamp programme, which is pegged at $60-70 billion every year, is already in the WTO green box. The current rules are unfair as they say that India can?t continue with its minimum support programme and they go against India?s interest,? said Abhijit Das, head and professor, centre for WTO Studies, Indian Institute of Foreign Trade.

The issue is likely to be raised by commerce and industry minister Anand Sharma with director-general of WTO Roberto Azev?do on the latter?s maiden visit on October 7. Azev?do is coming to garner support to get an agreement on three critical issues of the Doha Development Agenda (DDA) ? trade facilitation, agriculture and development/LDC issues.

This is Azev?do?s first visit to India since he took over as WTO DG from Pascal Lamy in early September. Since the ninth WTO ministerial conference in Bali is just eight weeks away, the WTO DG?s visit is significant and crucial given India?s important role in the multilateral trade negotiations.

On September 30, Azev?do told WTO ambassadors at the Trade Negotiations Committee meeting that: ?Political engagement of capitals is becoming increasingly critical. I am also asking your ministers to consider the bigger picture ? the fate of our negotiating arm and with it, the DDA. But more importantly, as I have repeatedly stressed, at stake is the credibility of the multilateral trading system itself?.

On his visit, besides meeting Sharma, the DG will also interact with industry chambers.

Ficci and Centre for WTO Studies are jointly organising a seminar on ?WTO, Multilateral Trading System and Bali Ministerial: Where Do We Stand & The Way Forward?.

WTO members initiated negotiations on Trade Facilitation (TF) in 2004. The ongoing WTO negotiations on TF seek to develop a set of multilateral trade rules that aim to simplify, modernise and harmonise trade procedures with a view to ensuring smooth movement of import, export and transit goods across the international borders.

?The developed countries are collectively trying to clean up the proposals of their interest, while maintaining frivolous objections to the proposals tabled by developing countries. They are reluctant to accept the trade facilitation proposals tabled by developing countries and LDCs,? added a commerce ministry official.

For instance, they want India?s proposal on Customs Cooperation to be accepted on a ?best endeavour? basis, while their proposals are to be accepted by developing countries on a binding and justiciable basis,? said a commerce ministry official.

India, along with other emerging and developing countries are against a deal on trade facilitation, which is being pushed by rich countries that seeks to cut transaction cost along international borders for smoother flows of goods, until and unless they agree to conclude the discussion on the food security proposal.