India to Play Hardball on Peace Clause at WTO

India will not give up the peace clause on food security at the World Trade Organization (WTO) if the ‘permanent solution’ being currently negotiated imposes an additional compliance burden. The peace clause protects India’s food procurement programmes against action from member-countries in case subsidy ceilings are breached.

“Many developed country members are trying to make the permanent solution on subsidies for public stock holding so onerous that it would be difficult for developing countries to meet the conditions. In case what is offered to us at the Buenos Aires ministerial meet is more stringent than the peace clause we negotiated last time, we will stick to the peace clause,” a government official told.

According to the peace clause negotiated by India at the Bali meet in December 2013, no action will be taken against India, or other developing countries, in case the subsidies on their food procurement programmes breach the ceiling of 10 per cent of value of food production laid down by the Agreement on Agriculture.

Although the Bali declaration also stated that the peace clause was an interim arrangement, and a permanent solution should be negotiated by December 2017, in 2014, New Delhi pushed the WTO members into making the peace clause perpetual till a satisfactory permanent solution was in place.

“As the peace clause can be used in perpetuity, we are under no pressure to give it up in favour of a permanent solution that is less desirable. There are some clauses being pushed by some members that are completely unacceptable,” the official said.

For instance, India is being asked to commit that it would not export from public stocks, which was not explicitly stated in the peace clause. The EU is also trying to link a permanent solution to India and China taking on commitments to reduce domestic support and also give up some of the special and differential treatment it has access to.

India, on the other hand, is trying to get some of the existing conditions under the peace clause removed. One such condition is removing the transparency clause, which mandates that users of the peace clause should declare in advance that their subsidy limits would be breached.

“India must aggressively push for getting a better permanent solution than the peace clause as there are doubts whether it can be effectively used given the existing conditions,” said Ranja Sengupta from the Third World Network.

India and the G-33 group of 47 developing countries have been insisting that a satisfactory permanent solution to public stock holding has to be a part of any package that is agreed upon at the Eleventh Ministerial Meet of the WTO in Buenos Aires from December 10-13.