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Yielding on 4-year window,India walks away with WTO deal

Decision will forward stalled Doha global trade talks under the WTO after a 12-year gap.

Written by Surabhi | Bali |
December 7, 2013 2:23:09 am

After over 30 hours of gruelling negotiations over the last two days of the World Trade Organization ministerial conference,India got across its concerns over food security,while accepting,as part of a trade facilitation pact,lower trade barriers to speed up movement of goods through customs.

The decision will take forward the stalled Doha Round of global trade talks under the WTO after a 12-year gap. The decision will also provide the UPA government space to roll out its food security act without running foul of the global trade regime.

India and other developing countries have been given a four-year window until the Eleventh Ministerial as an interim solution — or ‘peace clause’ — but during which a permanent mechanism will have to be finalised for public stockholding for food security.

“It’s a great win. It’s a historic decision. It is a victory not only for India but for all developing countries,” Commerce and Industry Minister Anand Sharma said after an informal meeting of the 159 member nations with WTO chief Roberto Azevedo.

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The decision covers all existing and future food security programmes of developing countries.

An official said that updation of food prices that are currently linked to 1986-87 prices will be reviewed during the post-Bali work programme,and a new formula for calculating subsidies drawn up.

“India was steadfast about a horizontal balance in the Bali package not only for itself but also for all developing countries,” Sharma said,adding that India’s demand for an “umbilical linkage” between the interim and permanent solution was also accepted.

But developing nations will be bound to notify the WTO’s Committee on Agriculture if they are in danger of capping the 10 per cent subsidy limit. Market-distorting activities are prohibited,and actions would be monitored closely by the WTO.

The text,officials said,has also taken into account India’s concerns on the trade facilitation (TF) agreement. A number of India’s proposals regarding farm exports to developed countries,air courier services and customs clearances have been accepted.

“This is the first such pact adopted by the WTO in nearly two decades. Since there was balance in agriculture package,this too was accepted,” said a source.

The Bali package has also called for the trade facilitation pact to be put in place over the next two years,for which a preparatory committee would be set up. The pact will put in binding rules to ensure easier movement of goods that could potentially add $ 1 trillion to the global GDP,according to a WTO study.

But arriving at such a consensus was not easy,and the ministerial conference had to be extended until early Saturday morning. Most trade ministers also extended their stay by a day.

“We withstood pressure,we did not blink,” Sharma,who was closeted in meetings with the WTO DG,Indonesian trade minister Gita Wirjawan and US Trade representative Michael Froman till late on Thursday night,said.

Further negotiations between India and US until early Friday morning too failed as India was not satisfied with the compromise offered. Another meeting later in the day with all trade ministers with the WTO chief also did not yield results.

Finally,another meeting of all trade ministers was called at 8 pm local time by the WTO chief,where a compromise was thrashed out. However,sources said Cuba remained upset over concerns in the TF pact.

Nearly 25 countries including Egypt,Brazil and Venezuela had supported India’s concerns on food security and called for a review of the original Bali package.

The Bali package will now be endorsed by the union cabinet and placed before Parliament.

Sources said Sharma was continuously in touch with New Delhi,and spoke to the PM twice on Friday. The issue was also discussed at the special meeting of the cabinet that was called to condole Nelson Mandela’s passing.


WTO reached an agreement on Friday to allow countries to provide subsidy on staple food crops without any threat of punitive action.

ANAND Sharma said: “A great day for India,I am more than happy…”


INDIA gets 4-year window for rolling in food security

TIME till 11th ministerial to work on interim solution


ACCEPTS monitoring by WTO if 10% cap likely to be breached; trade facilitation pact to allow easier cross-border trade.

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