Battle lines drawn as WTO meet begins in Nairobi

Just two days before the World Trade Organization's (WTO) 10th ministerial conference is set to begin in Nairobi on December 15, India is facing a tough battle ahead.

While India has maintained an unflinching stance on the points of contentions - agricultural issues including public stockholding of food crops and providing subsidies to farmers - the reports from WTO headquarters in Geneva suggest otherwise.

Developed members at WTO including the United States, Canada, Australia and European Union oppose public stockholding of food crops by India. While the country has argued that a large, poverty-stricken populace necessarily requires the safety net of buffer foodgrain, the WTO has alleged it goes against the intrinsic principles of non-interference with free market practices.

The Trade Facilitation Agreement signed by India in 2014, allows it to maintain its food buffer stocks till a permanent solution is found. But it still cannot export such subsidised food owing to opposition from developed countries alleging it distorts market prices.

Back then, the United States and India had also agreed to a 'peace clause' which allows India temporary protection from complaints by other WTO members.

India has stressed the clause was off the negotiating table as was the case for all items agreed during and post the Bali conference in 2013. In return, it had tightened pressures on rich countries by opposing international food aid programs financed by them, which it claims equally distorts international food prices especially in poorer economies.

Rich countries also want India to cut down on input subsidies currently given for fertiliser, seeds, pesticides and irrigation. They also want capping of the Minimum Support Price (MSP) paid to farmers. Tellingly, the same countries have however, refused to lower high levels of targeted agricultural subsidies, often to the tune of 70-80 per cent, provided to their farmers. "The repeated refusal by developed bloc to discuss this has led to considerable frustration amongst the developing nations," Commerce Minister Nirmala Sitharaman has said.

Sitharaman has pointed out a permanent solution, as India's primary objective with regards to agri issues, but has vigorously been in support of continuing the Doha Development Agenda, which had seen little real progress after being adopted in 2001.

This time, India has carefully aligned itself with the developing bloc, including China and has carefully focused on the LDCs.

The argument of differentiation put forth by developed countries, which sought to drive a fissure through the developing bloc, has only strengthened this alignment. India has junked the notion that all developing nations should be segmented on the basis of their economic growth rates. It has also vehemently opposed any insinuation that mega economies like India and China were appropriating the fair share of trade benefits from poor countries with lower growth.

The new relationship equations have also helped in other ways. A special safeguard mechanism (SSM) in agriculture, long pushed forward by developing bloc, has now also reached a crescendo with international groupings like the G33, BRICS and the African Bloc supporting it.

Commerce Secretary Rita Teaotia had said SSM, which allows countries to temporarily raise tariffs to deal with surging imports and subsequent price falls, should be modelled on the existing Special (Agricultural) Safeguards (SSGs) enjoyed by rich counties.

Taking into account that trade agreements are ultimately about lowering tariff walls, India has held it will be impossible to reduce tariff duties while having no safeguard mechanism against sudden surge in prices. Policy instruments protecting domestic farmers could not be done away with, especially for farm products such as poultry, dairy and apples which were highly susceptible to price rise.

The negotiations at Nairobi will not only be important to pertinent issues concerning WTO. India has termed it, "the plurilateral bedrock of India's trade engagement with the international community".

It has also blamed the emergence of regional, multilateral trading blocs are partly due to frustration with WTO policies that countries face. The mega trade body recently maintained trade partnerships like the Trans-Pacific Partnership are complementary and not a substitute for the multilateral trading system.

TRADE DEVELOPMENT OVER THE YEARS
  • 1995: WTO comes into existence

     
  • Nov 2001: Fourth Ministerial Conference in Doha, Qatar sees WTO members agreeing on the Doha Development Agenda, the ninth trade round which is intended to open negotiations on opening markets to agricultural, manufactured goods, and services

     
  • Dec 2001: China joins the WTO after 15 years of negotiations

     
  • Sept 2003: 5th Ministerial Conference in Cancún , Mexico aims at forging agreement on the Doha round. An alliance of 22 southern states, the G20 (led by India, China and Brazil), resist demands from developed countries for agreements on so-called " Singapore issues ", on competition policy and on public procurement in trade talks. Instead, they called for an end to agricultural subsidies within the EU and the US. Talks break down without progress

     
  • Jul 2008: Ministerial talks aimed at resuscitating the Doha Round of talks break down on ninth day of meeting after the US and India fail to find a compromise on measures intended to help poor countries protect their farmers against import surges

     
  • Dec 2015: 10 th ministerial meeting at Nairobi, Kenya

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