Delegates at the 13th WTO ministerial conference in Abu Dhabi, United Arab Emirates.
Credit: Reuters Photo
India has not managed to make any major gains at the 13th ministerial conference of the World Trade Organization (WTO), held from February 26 to March 2, in Abu Dhabi, in the United Arab Emirates (UAE). The best one can say about the outcome is that the country has emerged unscathed from battles with the Global North over agriculture and fisheries.
Efforts to ensure that subsidies on public stockholding programmes for foodgrains will not be disputed have succeeded, but these continue to be on an ad hoc basis. The ‘peace clause’ that confers protection on subsidies linked to food security has been extended temporarily yet again rather than being made permanent. Similarly, subsidies for the fisheries sector in developing economies will continue but those of the developed world will also remain at inflated levels. In other words, it is status quo for India while the developed world continues to pay enormous subsidies to their farming and fishing communities.
The computation of subsidy at the WTO is not on a per capita basis. Thus, Indian farmers and fishermen may get a tiny subsidy on a per capita basis, but the volume of subsidy is calculated for fixing a ceiling. Not only that, the subsidy estimates are based on outdated 1986-1888 prices. The result is that rich nations continue to carp over subsidies being given to poor farmers in emerging economies even though their subsidies to the farm and fishing sectors are vastly higher.
On the agriculture issue, it must be recalled that the issue of public stockholding for foodgrains in India was raised at the Bali Ministerial Conference in 2013. The subsidy on government stocks in India was higher than the WTO ceiling for developing countries which is 10 per cent of the value of production. India had then rightly argued that the stocks were based on foodgrains purchased from farmers at minimum support prices to provide livelihood support. It was pointed out that roughly 80 million farmers would be affected by withdrawing such support and most were in the subsistence category.
It was also explained that the stocks were being used to provide subsidised food grains to hundreds of millions of people comprising the weakest sections of society. These arguments succeeded in ensuring there would be no challenge to subsidy on public stockholding programmes by introducing what was known as the ‘peace clause’.
The clause, however, remained a temporary provision, and has been extended repeatedly to protect from any disputes. It was hoped that after a decade of this temporary arrangement, the Abu Dhabi Conference would arrive at a permanent solution.
The atmosphere was not conducive to a decision as the Cairns group of agricultural exporting countries took an aggressive posture even before the meeting began. The group which comprises 20 countries including Australia, Canada, Thailand, and Brazil is reported to have taken the stance that India’s farm subsidy was not only distorting global food prices but affecting the food security of other countries.
It is against this backdrop that India’s delegation led by Commerce Minister Piyush Goyal had to fight a rearguard action to protect the livelihood concerns of Indian farmers at the multilateral trade body. The fracas with Thailand’s WTO Ambassador who claimed the rice subsidy was meant for exports rather than food security is indicative of the distorted narratives being peddled at this forum. Despite the controversy, India was able to prevent any challenge to the peace clause. But it could not succeed in making it a permanent provision.
As for the fisheries sector, the effort to cut massive subsidies given by developed countries failed though the interests of Indian fishermen were protected as in the past.
On one score, India can claim success and that was in blocking the proposal led by China to bring investment facilitation into trade-related discussions. By joining hands with others in the Global South, it was able to prevent the entry of the non-trade issue into the negotiating process. The proposal is part of the drive by developed economies to bring non-trade matters to the WTO agenda.
One thing is clear — India will need to undertake stronger efforts to build a coalition of developing economies to deal with the aggressive posturing of the Global North. Diplomatic initiatives of this nature had in the past enabled India to become a major force at the WTO. Previous commerce ministers like Murasoli Maran, Arun Jaitley, and Kamal Nath managed to form groups to stymie efforts to push forward the agenda of the developed world. Similar tactics are needed now as only a collective effort can ensure that the trade body becomes an agency to protect the interests of the global poor.
(Sushma Ramachandran is a senior journalist.)
Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.