Union Cabinet Approves Stands taken by India at Bali Ministerial

The Union Cabinet on 19 December approved the stand taken by India at the Ninth Ministerial Conference of the WTO held in Bali, Indonesia during 3-7 December 2013.

Background:

The two key issues for the Ninth Ministerial Conference of the WTO were Trade Facilitation and a proposal on Food Security.

While the accumulation and holding of public stocks for food security purposes is classified as non trade-distorting, procurement at administered prices (Minimum Support Prices in India) is considered to be implicitly trade distorting and is, therefore, subject to a limit under WTO rules.

Since the limit can be a constraint on the procurement operations of developing countries, India, along with other developing countries submitted a proposal in the WTO for a suitable amendment in the rules to address this issue.

During the conference, ministers agreed on a decision that provides for an interim period of protection to public stockholding programmes for food security purposes of developing country members from being challenged in the WTO, on the grounds of exceeding the support which they are entitled to provide. It further provides that members must agree on a permanent solution on this issue for adoption by the 11^th Ministerial Conference of the WTO.

This Decision ensures that trade rules in respect of agriculture do not come in the way of initiatives aimed at self-sufficiency in food and stabilization of domestic prices. As a result of the decision, procurement operations of developing countries will not be constrained by their existing farm support limits. Developing countries will be able to run food security programmes for their under-nourished and hungry populations without the fear of violating WTO rules under the Agreement on Agriculture.

Prior to the Bali Ministerial Conference, the Cabinet had provided directions to the Commerce and Industry Minister on the stand to be taken by India. Acting on these directions, India took the position from the beginning that food security was non-negotiable and maintained its position that until a permanent solution to the issue was found, the interim mechanism must not be terminated.

As a result of its unwavering stand and the support it was able to muster, India succeeded in getting the text on Food Security appropriately amended.

The final agreed text addresses India's core concerns. It has a firm commitment from members to work on a permanent resolution. In the interim, until a permanent solution is found, eligible members will be protected against challenge in the WTO, under the Agreement on Agriculture in respect of public stockholding programmes for food security purposes. By implication, until a permanent solution is found, countries like India will have the flexibility of providing support to its farmers without the apprehension of breaching its entitlements.

Since most of India's demands and concerns were appropriately addressed in the Trade Facilitation Agreement, India endorsed the proposed Trade Facilitation Agreement. The new agreement will create a set of disciplines that would ensure that all WTO Members not only simplify their rules and procedures, but also follow modern techniques for facilitating clearance of goods across international borders. The agreement would eventually lead to reducing dwell time, removing unnecessary formalities and documentation, and ensuring faster release and clearance of goods at international borders. This will go a long way towards improving India's trade administration and providing a more conducive business environment to traders.

On other issues being negotiated for the Ninth Ministerial Conference, India supported the broader consensus as it did not have any specific concern.

This was a landmark Ministerial Conference as the WTO has been able to conclude a multilateral agreement for the first time since its establishment. The outcome at Bali has restored faith in the WTO as a multilateral negotiating forum. It is a major step towards resuming the Doha Round of trade negotiations, especially in the agriculture sector. It has also given a clear signal to the world that while India is prepared to negotiate, it cannot and will not accept unbalanced agreements in any area, and least of all in an area of its topmost priority, namely food security and the welfare of its farmers and its poor.

[Source: PIB (Cabinet) Press Release dated 19^th December 2013]