India cautions against linking safeguard provisions to food security solutions

India cautions against linking safeguard provisions to food security solutions

Developing countries led by India and others want world trade rules to ensure that they will not be challenged legally if they breach a country’s agreed limits for trade-distorting domestic support

India has cautioned against what it says are un-implementable transparency and safeguard provisions that are being sought to be linked by some countries to an agreement on a permanent solution for public stockholding programs for food security (PSH)—a core Indian demand —at an upcoming meeting of trade ministers in Buenos Aires.

Developing countries led by India and others want world trade rules to ensure that they will not be challenged legally if they breach a country’s agreed limits for trade-distorting domestic support, such as minimum support prices for crops.The matter tops the agenda of trade ministers who are set to gather in Buenos Aires for the World Trade Organisation’s (WTO) 11th ministerial meeting on 10-13 December.

The European Union (EU), Brazil, Australia, Canada, Pakistan and Paraguay, among others, want PSH to include stringent “transparency and safeguard provisions” in order to ensure that stocks procured under the programme do not leak into the international market and thus end up influencing global prices

On 25 October, the WTO director general Roberto Azevedo held a closed-door meeting with a dozen trade envoys from the EU, Norway, India, Russia, Indonesia which coordinates the G33 Group, Turkey, Korea, Dominica, Kenya, and Egypt among others to discuss the elements in the PSH.

At the meeting, India’s trade envoy J.S. Deepak suggested that the interim agreement on PSH hammered out in December 2013, in Bali, Indonesia, had in any case imposed stringent transparency provisions on developing countries, according to an African trade official who was present.Except for one or two countries like New Zealand, the major industrialized countries will find it difficult to comply with the transparency provisions set out in the Bali agreement on PSH programmes, Deepak maintained, according to the African official.

India demanded that the permanent solution must not contain “disproportionately stringent” transparency and safeguard provisions that would make it impossible to use, the official maintained.So far, the G-33 coalition in which India and China are key members, the EU and Brazil along with a group of countries, and Russia among others have circulated proposals on how to finalize the permanent solution. The EU and Brazil maintained that such a solution must include stringent transparency provisions along with domestic subsidy cuts for farm products.

India had already rejected the linkage between the permanent solution and cuts in domestic far support at a meeting of informal heads of delegation on 24 October.The prospects for an outcome on cutting domestic support look bleak as members remain sharply divided while the pressure for an effective permanent solution for PSH programmes has intensified. India has built a large coalition of countries to take the case forward for a simple and effective permanent solution for public stockholding programmes, the African official maintained.

India’s stand on balanced transparency and safeguard provisions was supported by Indonesia, Turkey, Korea and Kenya at the meeting.The EU said it is in favour of a permanent solution for PSH programmes along with an outcome on domestic support while Norway said the permanent solution must be close to the interim solution that was agreed in Bali.

In response to India’s demands for workable transparency provisions, Azevedo suggested that if India opens up the Bali agreement on transparency or safeguards then it will have to offer something more in other areas, according to a European official who asked not to be quoted.In a new proposal circulated on 25 October, Russia suggested that while it can agree to lower the bar on transparency provisions it will need stringent safeguard provisions to ensure that China and India do not export wheat or other products to international market from their public stocks, said a person who is familiar with the Russian proposal.

Meanwhile, in a separate meeting of select trade envoys convened by Azevedo on 25 October to discuss the domestic subsidy cuts, India and China made it clear that their proposal for eliminating the most trade-distorting farm subsidies must remain as the basis for further negotiations

The  Mint, New Delhi, 30th October 2017