Food security: India, China want ‘legal certainty’ for permanent solution

India wants ‘legal certainty’ for the mandated permanent solution for public stockholding programmes for food security that needs to be concluded at WTO’s Buenos Aires meeting next month

India wants “legal certainty” for the mandated permanent solution for public stockholding programs (PSH) for food security that needs to be concluded at the World Trade Organization (WTO) ministerial meeting in Buenos Aires next month, after Norway and Singapore issued a draft ministerial decision replete with stringent conditions for using the instrument, according to people familiar with the development.

At a meeting among select countries on 22 November, India cautiously approached the joint proposal from Norway and Singapore suggesting that while there are some changes in transparency provisions, the proposed anti-circumvention/safeguard provisions cannot be accepted as they go well beyond the 2013 Bali interim decision.

India along with China and other G33 members called for “legal certainty”, implying that there has to be an amendment in the Agreement on Agriculture for the permanent solution. Without legal certainty, which is the raison d’etre for all WTO agreements, India and other PSH users can be subjected to trade disputes on specious grounds by countries opposing such programs such as Pakistan and Paraguay.

At the meeting, the US said it will not accept anything on the permanent solutions that takes things back from the Bali interim peace clause of 2013, said a participant who asked not to be identified.

The European Union maintained that it wants stronger transparency provisions.

In a four-page restricted proposal issued on 20 November, Norway and Singapore unveiled the “transparency” and “anti-circumvention/safeguard” condition for availing of the permanent solution by developing countries. It stipulates that the beneficiaries must comply with four “transparency” conditions. They include informing the WTO about “exceeding or risk of exceeding” the agreement measurement of support or most trade-distorting farm subsidy limits; timely notification of domestic subsidies; information about breaches if any on a post-ante basis; and prompt notification of statistical information.

Ironically, the joint proposal by Norway, which is one of the leading farm protectionist countries in the world, and Singapore, which has virtually no agriculture, listed two “anti-circumvention/transparency” conditions.

India and other developing countries that need a permanent solution must ensure that “stocks procured under such (PSH) programs do not distort trade or adversely affect the food security of other members”.

Effectively, India and other developing countries must ensure that stocks procured for their PSH programs do not enter “direct or indirect exports”.

This is an onerous condition which is difficult to comply with at a time when India’s agricultural exports, particularly rice, are growing, and it can easily be accused of exporting products from its PSH stocks, said a Geneva-based trade analyst who asked not to be identified.

The joint proposal from Norway-Singapore also says the permanent solution “shall not be used in a manner that results in an increase of the [subsidy] support” subject to the scheduled commitments of India and other countries for AMS or de minimis support in the previous Uruguay Round.Then there are also issues such as whether developing countries without PSH programs can use and the conditions they have to comply with, the analyst said.

In sharp contrast to the stringent conditions for availing the permanent solution for public stock holding programs for food security for hundreds of millions of poor people in India and other developing countries, there are no such conditions for more than US$ 200 billion green box subsidy programs that are provided by the United States, the EU and other rich countries even though these programs distort global trade. “There are one set of hard, un-implementable conditions for developing countries like India at the WTO, and then there are kid-glove norms for most trade-distorting subsidy programs provided by the US and the EU,,” the analyst said.

However, the issue that dominated the meeting on Wednesday (22 November) was the linkage between the permanent solution for PSH programs and an outcome on the domestic support at Buenos Aires. Brazil demanded that there has to be parity between the three issues concerning domestic support, permanent solution for PSH and cotton.

Brazil said it is ready to work on a proposal tabled by Mexico for cutting domestic farm subsidies. The Mexican proposal calls for proportionality in the commitments to reduce domestic farm subsidies. Brazil suggested harmonization of commitments on the domestic support between all members, a position that was long held by the US, the participant said.

India and China, however, rejected the Mexican proposal on grounds that it includes de minimis. China said categorically that it will not accept any attempt to undermine the special and differential flexibilities enshrined in Article 6.2 of the Agreement on Agriculture. India emphasized the importance of eliminating the Aggregate Measurement of Support (AMS) and the product-specific subsidies.

Source: Livemint

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