WTO talks down to the wire, India holds out

Written by fe Bureau | New Delhi | Updated: Jul 31 2014, 06:38am hrs
IndiaThe TFA will take effect only if two-thirds of the member countries ratify it by July 31, 2015.
Even as Thursdays deadline for signing the protocol for the trade facilitation agreement (TFA) at the WTO loomed large, India remained obdurate, asserting that the pact expected to ease customs rules and potentially add $1 trillion to the world economy could not be a done deal till it saw progress on the food security issue.

Visiting the US commerce secretary Penny Pritzker, however, sounded optimistic about finding a solution to the vexed issue over the next couple of days.

Secretary of state John Kerry, before starting for India on Wednesday morning, had expressed the hope that Indias opposition to TFA would wither away, adding that this was a test case for the countrys commitment to advance liberalisation of global trade and investment. Kerry arrived in India in the evening on a three-day visit.

A senior official with Indias commerce ministry told FE: There is no change in Indias stand. We continue to maintain that the TFA must be implemented only as part of a single undertaking including the permanent solution on food security.

The TFA will take effect only if two-thirds of the member countries ratify it by July 31, 2015. Breaking the deadlock in the WTO talks was likely to top the agenda for Kerrys visit, sources said.

India has so far got the support of just a handful of developing countries such as Cuba, Bolivia and Venezuela, but countries such as China and even Pakistan want the implementation of the TFA as per the timelines agreed earlier.

Even as the WTO director general Roberto Azevedo asked the WTO member countries to be available at the global bodys Geneva headquarters to meet at a short notice till the July 31 deadline ends, hectic discussions were held on Wednesday between commerce ministry officials and the Indian delegation in Geneva.

On July 25, India, in its statement before the WTOs General Council, had suggested that the adoption of the trade facilitation protocol be postponed till a permanent solution on public stockholding for food security is found.

New Delhi also suggested a four-point course of action, including setting up a special session of the Committee on Agriculture to ensure clear-cut procedures, timelines and outcomes, to arrive at a permanent solution by December 31, 2014. It also wanted a similar approach on other elements of the Bali Package, including the LDC issues. New Delhi then sought a review of the progress of these accelerated discussions in October 2014 by the General Council.

However, countries such as the US said the July 31 deadline on TFA was agreed upon by all members and walking away from their commitments at Bali will kill the agreement and flip the lights off WTO.

On agriculture, the key issue is public stockholding for food security purposes. Members had agreed for a permanent solution by the 11th ministerial conference (slated for December 2017).

In the interim, members shall refrain from challenging through the WTO disputes settlement mechanism, the support provided by other members for traditional staple food crops in pursuance of public stockholding programmes for food security purposes.

WTO norms say public stockholdings cannot be over 10% of the value of foodgrains produced. India is challenging the calculation of public stockholding at the base price of 1986-88 citing inflation and currency fluctuation since then. What is making Indias stand weak on agriculture is due to the fact that it has not filed its domestic support notification obligation (on subsidies) before WTO since 2004.

Meanwhile, WTO said in a statement that its members started to exchange views on the contents of a work programme for concluding the Doha Round agriculture negotiations when they met on July 23, although they said more details were necessary if new approaches were to be considered as they work to meet the year-end deadline.

Facilitating trade

* The December 2013 Bali Ministerial Declaration comprised a trade facilitation agreement (TFA), a set of agriculture-related decisions & a development plank

* The WTO General Council was to meet by July 31 to finalise a protocol to implement TFA, two-thirds of the members need to ratify the protocol by July 31, 2015

* India, with support from G-33, got members to agree to negotiate a permanent solution on food subsidies by the 11th Ministerial in December 2017

* In the interim, members would not challenge, via the Dispute Settlement Mechanism, the compliance of any developing nation with the Agreement on Agriculture

* Members also committed to an interim review by the 10th Ministerial in December 2015

* As per AoA, public stockholdings cannot be over 10% of the value of grain produced. India challenges use of base price of 1986-88