WTO to India: Resolve issues on food security before Bali meet

Updated on : 08-10-2013 11:26 AM

Amid concerns being raised by developed countries over the government’s food security programme, new WTO chief Roberto Azevedo on Monday asked India to work out a solution to the vexed issue ahead of the Bali ministerial meeting in December.

"One important issue where India is very much involved is food security proposal...As you can imagine with an issue this big, this is not going to be fully solved in 4 weeks. Its just not going to happen. "What we have agreed in Geneva is we are going to be working on a Peace Clause ...which allows negotiators in Geneva to find a more permanent solution for the long term," he while addressing members of the industry chamber CII. The WTO headquarters is in Geneva. He further said that WTO members have less time and the trade ministers should now engage with each other and give right signals to their negotiators.  While the G-33, a group of developing nations including India, is demanding that the tenure (the peace clause) should be 10 years, developed countries such as the US are ready to accept only a 2-3 year period. A so-called "peace clause" in WTO parlance gives legal security to member countries and protects them from being challenged under other WTO agreements.  "Between now and Bali, what we have to do is figure how that Peace Clause is going to work. How that is going to be crafted to take into account the concerns of the two sides...you allow the programme to continue unimpeded, the other side of this part is not allowing programme which are designed to provide food security...do not distort market unnecessary and unduly," he added.  He also talked on the importance of concluding the trade facilitation agreement saying it would help in reducing transactions cost for exporters. Negotiations for a deal at the Bali meet are stuck over the tenure of an interim resolution on the demand by G-33 developing countries on food security.  The ninth WTO Ministerial Conference will be held in Bali from December 3-6. The Ministerial Conference is the highest decision-making body of the 159-member WTO which meets at least once every two years. Azevedo took over as WTO DG from Pascal Lamy in September.  India is demanding amendments to the Agreement on Agriculture (AoA) under the WTO so that it can give more food subsidies to poor without attracting penalties. The AoA allows the so-called 'market distorting subsidies' up to a limit of 10 percent of total production. As food prices and the number of poor to be supported in developing countries have risen in the two decades since the AoA was framed, these subsidies have gone up substantially.  India is apprehensive that once the food security legislation is fully implemented, its food subsidies will breach the 10 per cent mark. When asked whether can India dilute its stand on the food security issue, Sharma said as all the WTO member-countries have different level of development and are facing different challenges, there is a need to find a middle ground. "There is no uniformity. When you have so many aspirations and different levels of development, you cannot have an issue specific and a country specific solution. You have to find a middle ground which is acceptable to all. You do not go for negotiations with a tight list," Sharma said.  "We are going to work intensely between now and Ministerial Conference in Bali to find a solution which will probably include both the elements of Peace Clause and something that ensures that a conversation (will) happen meaningfully after Bali," Azevedo said The "peace clause" in WTO parlance gives legal security to member-countries and protects them from being challenged under other WTO agreements. Countries like the US and Canada have raised concerns over Indias food security legislation at the World Trade Organisation (WTO). They have also asked India to explain the effect the legislation will have on global stocks and commodity prices. India has sought more time to come up with its stock requirement as the legislation is yet to be fully implemented. While the G-33, a group of developing nations including India, is demanding that the tenure (of the peace clause) should be 10 years, developed countries such as the US are ready to accept only a 2-3 year period.  The WTO chief is in India as part of an effort to bridge differences on several of the vexed issues of the Doha Round of trade talks before the ninth Ministerial Conference in Bali from December 3.  When asked about the future of WTO if Bali meet fails, Azevedo said: "Bali is absolutely critical in establishing the conditions for moving in areas other then the deliverables that we are looking for in December. Bali is not end of the road. It is the first step towards an agenda that we have to define for the WTO". On this, Sharma expressed optimism for successful outcome from the Bali meet. "We understand the criticality and the need of such an outcome. I remain optimistic considering the progress that we have made in the recent months and weeks. There has been much movement and we are hopeful that we will cover the desired ground. They are very complex talks".