At Bali WTO meet,India stands alone in defence of domestic food subsidy

At Bali WTO meet,India stands alone in defence of domestic food subsidy

China and Indonesia asked India to show flexibility to push stalled global trade talks.

India stood isolated at the WTO ministerial level talks Tuesday,insisting on its right to maintain domestic food subsidy and public stock holding norms,even as its major trading partner China and host Indonesia asked New Delhi to show flexibility to push stalled global trade talks.

India’s stance,highly placed government sources told The Indian Express,was prompted by clear instructions to Commerce Minister Anand Sharma that “it may not be desirable” to “endorse” the negotiations even if “India may be blamed for a failure at Bali”.

Sharma accordingly held a series of bilateral meetings at the island resort but differences remained.

Chinese Commerce Minister Gao Hucheng told Sharma,“We respect your stand but we are working for a positive outcome here. Doha round is a development round. We have worked very hard and every party has made compromises”.


Indonesia’s Trade Minister Gita Wirjawan too said India must understand “where the other guys are coming from”,for which there has to be some flexibility.

Egypt had voiced similar concerns in bilateral talks with India Monday. Tuesday was the first day of the three-day ninth ministerial conference.

Sharma maintained that while it was the collective responsibility of all 159 WTO members to reach an outcome,a balanced result is only possible if the “genuine concerns of all developing nations were addressed”.

Sources said the Union cabinet explored three potential options for the Indian negotiators and zeroed in on option B,which sought exemption for the Indian food security scheme from WTO restrictions on subsidies for an “indefinite duration”. New Delhi will want the exemptions to run until a permanent mechanism is evolved to accommodate food subsidy schemes as a condition for endorsing the Bali declaration. This is stiffer than the four-year peace clause that has been seen as a possible way out.

Sources also said the choice was made given the possible objections by the BJP and other stakeholders to the moderate peace clause.

Although the cabinet was also apprised that “it is unlikely that this would be accepted in WTO”,it has approved the position. In such situation,since India has consistently insisted on a balance in the Bali package,it may not be desirable to endorse the (final) agreement even though “it is likely that India may be blamed for a failure at Bali”.

But Wirjawan warned that the absence of a positive outcome at Bali would have “negative implications. Every country has its own national interest but for the spirit of multi-lateralism to work,one needs to show flexibility and compromise. I think that may be required for the agriculture package”.

The “so called” Bali package includes proposals on tariff rate quota administration,export competition,agriculture subsidies,streamlining trade facilitation as well as packages for least developing countries.

The need for a deal was voiced by WTO director-general Roberto Azevedo too,who said “the overwhelming message” from trade ministers is to take through the Bali deal.

“What we need is for ministers to take political decisions.the outcome is now in their hands,” Azevedo told a press conference.

Stressing that the Bali negotiations are the first step towards larger outcomes,the WTO chief however said there must be consensus on both trade facilitation and food security norms. “We have been negotiating these as a package. In our understanding,if one of these elements fails,everything fails,” he said.

“I think India comes strong in terms of linking the interim solution to the permanent solution but we also understand where the other guys are coming from. It is inconceivable to find a permanent solution here,” Wirjawan said on the sidelines of the conference.


To drum up support,Sharma also held bilateral talks with Zimbabwe and the European Union and also attended a luncheon meeting of the three-nation bloc of India,Brazil and South Africa.