India Talks Tough at WTO Bali Ministerial Meet

‘Food Security for 4 bn World Non Negotiable’, Says Anand Sharma

Arun Goyal, Editor ABS News Service @WTO Ministerial Bali Indonesia

Bali Nusa Dua Convention Centre, 4 Dec 2013.

Striking a bellicose mode in his address to the Trade Minsters at the WTO Bali meet, Commerce Minister Anand Sharma today said that ‘there can be no compromise ‘ on food security. “Elimination of hunger” and “Survival of the poor” are first priority. He went on to speak for the interests of all developing countries representing the interests of 4.3 bn people. Sharma threatened, “till the issues are successfully resolved, it may not be possible for us (meaning WTO members) to collectively reach a balanced agreement’.

India claimed to speak for the G-33, a group of 46 members who are agri goods consumers. Leading members include China, India, Indonesia and Pakistan besides the East African group and the smaller Latin American countries. Apart from Indonesia which is giving luke warm support to India, both China and Pak have back tracked on India’s stand ‘no compromise’ stance on allowing developing countries to subsidize agriculture production beyond the ten percent limit set by the WTO rules.

As of now, the Bali pact on the anvil will revive the Doha Round of trade promotion launched some 12 years ago in the aftermath of 09/11 holocaust in the US. This time round the package comprises of trade facilitation, one of the new issues taken up at Doha, under this, time standards will be set for clearance of goods at customs. Countries which violate the rules can be punished by the WTO Dispute Settlement Body. Also on the anvil is a package for the 45 members of the Least Developed Countries who will get waivers from the WTO rules and also preferential duty free and quota free’ (DFQF) markets of the rest of the WTO members in the developing and developing countries segments. Significant users of this window include Vietnam, Burma and Bangladesh.

The position of India on Food Security is seen as holding up the Bali Pact which will revive the Doha Round. Brazil, a one time ally of India in the G-20 group, has called for full implementation of the Doha process and not the limited agenda under the Bali pact. It has called for opening up of the agri markets by removing subsidies and non tariff barriers. India was a champion of this agenda till two years back when it switched sides to join the group represented by the developed countries which subsidize or restrict agri trade. This group comprises mainly of the US, EU and Japan. This time round, this group is not so vocal, partly because they have lost interest in WTO. Besides, agri prices have moved up in recent years reducing the pressure on subsidies. The other reason for their studied silence is that the Developing Country India is already saying what they would have liked to speak. India in their ranks gives strength and credibility to their view point on Agriculture subsidies and restrictions.

In the speech delivered to the delegates with much passion and controlled anger, Minister Sharma said ‘WTO has lost its way”. He called the agriculture packages at WTO “half baked”. The LDC package was only “a statement of pious intent”. The trade facilitation agenda had “several unresolved issues”. He called for “horizontal balance” in the Bali pact without really defining what he meant by the term. He called financial support to both developing and least developing countries to facilitate the trade facilitation process.

Sharma called for the updation of the dated WTO rules on calculation of subsidies which were not updated for price changes and trade flows for more than 20 years. He said that poor farmers can be supported only by public procurement and building stocks for food security. The clause of “due restraint” on these policies by the WTO rules is being challenged by the G-33.

In the closing remarks, Sharma called for post Bali work to conclude the Doha Round. The whole focus has shifted to India which has become the talk of Bali. The conclusion to the meet depends on the US, EU, Japan, and China. They may prevail on India and its allies to reach a compromise with a peace clause which protects the developing countries from WTO action for a period of four years under the ‘peace clause window.

(The author will send daily despatches to the readers for the next three days ending 6 December on which day the WTO meet will come to a happy (?) end).