(MENAFN- The Arabian Post) India on Thursday achieved a major victory with the US agreeing to its proposal on food security issues at WTO, a development that will pave the way for a breakthrough to end the three-month long stalemate.
The agreement comes two days ahead of the G-20 Summit in Australia, which will be attended by Prime Minister Narendra Modi and other world leaders including the US President Barack Obama. The two-day meet begins on Saturday in Brisbane and WTO related matters are likely to come up during discussion between world leaders.
As per the agreement, the US will support India's proposal at WTO that 'peace clause', crucial for uninterrupted implementation of India's food security programme, should continue indefinitely till a permanent solution is found.
This will enable India to continue procurement and stocking of foodgrain for distribution to poor under its food security programme without attracting any kind of action from WTO members even if it breaches the 10 per cent subsidy cap as prescribed by the multilateral trade body.
As per the Bali agreement, the peace clause was to continue till 2017.
The differences on the public stock holding of foodgrains between the developed countries led by the US and developing nations including India led to impasse over ratification of the trade facilitation agreement (TFA) at Geneva in July.
The agreement between the US and India, according to WTO Director General Roberto Azevedo, will provide a basis to intensify consultations with other WTO members to overcome the present stalemate and to promptly implement all Bali ministerial decisions.
Briefing reporters, Commerce Minister Nirmala Sitharaman said: "India and the US have successfully resolved their differences relating to the issue of public stock holding for food security purposes in the WTO in a manner that addresses our concerns. This will end the impasse at the WTO and also open the way for implementation of the TFA".
On the development, the USTR said that both India and US have reached an understanding on implementation of Bali decisions.
"The bilateral agreement makes it clear that a mechanism under which WTO Members will not challenge such food security programmes under WTO dispute settlement procedures will remain in place until a permanent solution regarding this issue has been agreed and adopted," the USTR today said.
Following the agreement between the two important players of the WTO, its highest decision making body General Council will deliberate upon the proposal in the second week of December.
Sitharaman expressed hope that the Council would clear the way for India to sign a protocol for implementation of the trade accord.
India had asked WTO to amend the norms for calculating agri-subsidies so that the country could continue to procure foodgrains from farmers at minimum support price and sell them to poor at cheaper rates without violating WTO norms.
The current WTO norms limit the value of food subsidies at 10 per cent of the total value of foodgrain production. However, the quantum of subsidy is computed after taking into consideration prices that prevailed two decades ago.
There are apprehensions that once India fully implement its food security programme, it may breach the cap.
On the other hand, the developed countries apprehended that offloading of the subsidised foodgrain in the global market could distort world commodity prices.
The breakthrough, Azevedo said ,represents a significant step in efforts to get the Bali package back on track.
"It will now be important to consult with all WTO members so that we can collectively resolve the current impasse as quickly as possible," Azevedo said in a statement.
Once approved, the TFA, which seeks to ease custom norms, would be the first multilateral agreement to be concluded since the WTO's inception 20 years ago.
India's ambitious food security law aims at providing highly subsidised foodgrain to its 800 million poor people as also continuation of the support price for the farmers.
Attributing the successful bilateral talks to Prime Minister Narendra Modi's visit to the US in September, Sitharaman said: "After the Prime Minister's visit to US, there was a greater understanding of India's position."
The USTR said the agreement between the US and India paves the way for full implementation of the WTO's Trade Facilitation Agreement (TFA).
As decision-making in the WTO is based on consensus among all members, the elements agreed between the US and India will now be discussed with the full WTO membership in the interest of arriving at final and simultaneously-agreed decisions in the very near future, it said.
Sitharaman said that while the relevant WTO rules recognise food security concerns, their primary focus is to liberalise agricultural trade rather than to ensure food security.
However, the fact is that some of these rules are proving to be a hindrance to food security efforts.
"We believe that the rules of the WTO should support the food security efforts of countries rather than policies having to tiptoe around WTO rules," she said.
The minister also said that concerns expressed regarding the impact of India's stand in the WTO has undeniably resonated across the world and many countries saw merit in "what we were asking for. India was not alone or isolated. Others were simply not speaking up".
She expressed confidence that the membership will take the matter forward in the WTO in a constructive spirit.
"We urge the WTO membership to take this forward in the General Council on behalf of the Ministerial Conference," she said adding "the US will help in shepherding the proposal in the General Council meeting in Geneva".
She said that still work is under progress and "we see the resolution of the impasse is very close"It is moving towards a resolution"We have convinced the American government about our position being legitimate in taking care of the poor and a right to hold public stock holding for food grains".
The minister said that India is neither alone nor isolated in the WTO.
The proposal of the India and the US would be deliberated by the General Council and they would take a final call.
"When the Prime Minister went to the US, there was greater understanding of India's position by the American authorities and between the Prime Minister and the President, a certain level of cordiality prevailed"And that sense of appreciation certainly helped," she added.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.