What is the food stockpiling issue at the WTO?

Here's everything you need to know about the 11th edition of the ministerial conference (MC11) of the World Trade Organisation held in Buenos Aires in Argentina.

By: Express Web Desk | New Delhi | Published: December 13, 2017 4:39 pm
Suresh Prabhu on food security issue at WTO Commerce Minister Suresh Prabhu delivers his plenary address at the World Trade Organisation Business Forum MC11 in Buenos Aires in Argentina (Source: Twitter/@sureshprabhu)

India on Thursday expressed “deep disappointment” as countries failed to reach a consensus over the food security issue at the 11th edition of the ministerial conference (MC11) of the World Trade Organisation, adding it posed a “severe threat” to the outcome of the meet. Without referring to the US, India said a major country has “reneged” on its commitment to deliver a solution to address hunger in the poorest countries at this meet.

What is MC11?

The four-day session, which was held in Buenos Aires in Argentina, began on Sunday and concluded on Wednesday. The MC, chaired by Argentinan Minister Susana Malcorra, is the highest decision-making body of the WTO. Attended by trade ministers and senior officials from the organisation’s 164 member countries, the meet takes place at least once in two years. The last two meetings were held in Nairobi, Kenya in December 2015, and in Bali, Indonesia in 2013.

The MC takes decisions on matters related to any multilateral trade agreement.

What is the food stockpiling issue at the WTO?

According to global trade norms, a WTO member country’s food subsidy bill is restricted to 10 per cent of the value of production, based on the reference price of 1986-88.

However, during the Bali conference, members agreed to an interim ‘Peace Clause,’ under which any breach of the ceiling by a developing nation would not be challenged. The clause was installed until a permanent solution was agreen upon — it was decided that one would be negotiated at Buenos Aires.

Activists hold a banner during a protest against the 11th World Trade Organization’s ministerial conference inside the hotel where the conference is held in Buenos Aires, Argentina December 12, 2017. REUTERS/Marcos Brindicci

What is India’s stance on this?

The Indian delegation at MI11 was led by Commerce Minister Suresh Prabhu. India had said the credibility of the WTO would be affected without a permanent solution to the issue. “India has emphasised that permanent solution was a must have and should be an improvement over the Peace Clause (agreed at Bali)… If not delivered, it would affect the credibility of the WTO,” J S Deepak, India’s Ambassador to WTO, was quoted as saying by news agency PTI.

In fact, in his plenary address, Prabhu had said, “We cannot envisage any negotiated outcome at MC11, which does not include a permanent solution.”

“This is a matter of survival for eight hundred million hungry and undernourished people in the world. A successful resolution of this issue would fulfil our collective commitment to the global community,” he had also said.

Was a solution negotiated? 

Despite agreeing to a consensus in Buenos Aires, members countries of the WTO hit a roadblock on Wednesday over the food security issue. The US, which questioned special and differential treatment to countries with a high GDP, refused to accept a permanant solution to the issue, reported PTI.

“We need to clarify our understanding of development within the WTO. We cannot sustain a situation in which new rules can only apply to the few, and that others will be given a pass in the name of self-proclaimed development status,” US Trade Representative (USTR) Robert Lighthizer said. “There is something wrong, in our view, when five of the six richest countries in the world presently claim developing country status.” He did not specifically mention India, China or any of the emerging nations.

Lighthizer’s comments are in line with the Trump administration’s claims that the US has received a raw deal from the WTO.

How has India responded?

Prabhu, while addressing a press conference, said special and preferrential treatment is an “important component” of the WTO, adding that developing countries like India are “legitimate demandeurs” of it.

“You cannot ignore realities that certain societies have been left behind in the process of development,” Prabhu said. “It is also noteworthy that many developed countries of today have benefitted from long periods of derogation from GATT rules in the area of agriculture and textiles,” he added, reported PTI.

Prabhu also raised the differences between developed and developing countries in providing agriculture subsidies, and called for it to be addressed.

Activists from India protest against the 11th World Trade Organization’s ministerial conference inside the hotel where the conference is held in Buenos Aires, Argentina December 12, 2017. REUTERS/Marcos Brindicci

No compromise on food security, says M S Swaminathan 

M S Swaminathan, known as the father of the Green Revolution in India, in a series of tweets, said the basis of negotiation at the WTO should be to “end hunger, achieve food security, improved nutrition & promote sustainable agriculture”.

“Minister @sureshpprabhu deserves gratitude for indicating at #BuenosAires #WTO that there’s no compromise on #foodsecurity. WTO exists to promote free & fair trade. “Fair” should include protection of livelihood & food security of our majority who depend on farming,” he tweeted. “… agriculture in many developing countries including India is not a commercial enterprise but the backbone of livelihood security of a large population.”

What about other member countries?

The European Union said this year’s MC has delivered “little sense of concrete progress”. EU trade commissioner Cecilia Malmstrom said, “The system is being challenged, members show insufficient collective ownership and are divided on key questions such as what the WTO should be doing. And there are growing calls for conducting business outside the multilateral setting.”

China’s commerce minister Zhong Shan had said: “Let us join hands and take real actions to uphold the authority and efficacy of the WTO.”

What about the other issues at MC11?

Without any decision on the food security issue, talks on other issues, including services, fisheries and e-commerce may remain unresolved, according to PTI.

(With inputs from PTI)

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  1. Chandrasekaran Venkataraman
    Dec 13, 2017 at 6:36 pm
    Such a very important issue has been covered nicely. However, the article should have brought out the implications for NOT continuing the 'special and differential' treatment to the developing countries from the STIPULATION THAT a WTO member country’s food subsidy bill is restricted to 10 per cent of the value of production, based on the reference price of 1986-88. Obviously, other member countries will raise the flag for invocation of 'penal' clause. How India will be affected ? ONE of the solutions can be that Income Tax be abolished forthwith for all citizens by the Indian Government so that more and more people take to agriculture as a profession/ investment and the agricultural labourers are assured of employment, there is no exodus from rural areas to urban, self-sufficiency in agricultural produce to sustain the huge population. There is need for urgent radical thinking and policy-making to outdo the effect of the WTO regime.
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