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West blinks at WTO India wrests
Bali deal on own terms

Commerce minister Anand Sharma at Nusa Dua in Bali on Friday. (AFP)

Dec. 6: India has managed to wrest an interim deal at a WTO ministerial conference in Bali that allows it to stock foodgrains for distribution to its poor as well as subsidise their sale, while ensuring its action cannot be challenged in any arbitration forum by member countries.

Top officials in New Delhi, tasked with providing back-up advice to the Indian delegation, told The Telegraph that India was able to get the Bali conference to draft an agreement on an interim mechanism, without any time limits, for the public stock-holding of foodgrain as well as obtain immunity from arbitration proceedings.

After tough negotiations over the past four days in the face of New Delhi’s unrelenting stand on food security, the 159-member World Trade Organisation (WTO) reached a historic agreement to boost global trade by $1 trillion.

The “all or nothing” agreement covers several areas, the largest of which is trade facilitation — a global standardisation and simplification of customs procedures that would tear down barriers to the cross-border movement of goods.

The deal also includes limited reforms in agriculture, including reducing export subsidies, opening borders to least developed countries, and the food subsidy policy championed by India, which proved the biggest obstacle.

The deal allows nations such as India to fix a minimum support price for farm produce and to sell staple grains to the poor at subsidised rates. It also permits countries to store foodgrain to meet contingency requirements.

“A great day for India, I am more than happy... India has clinched the WTO deal for the farmers and poor of the world,” commerce minister Anand Sharma said in Nusa Dua, Bali, after the final round of negotiations.

The draft agreement is expected to be adopted by the plenary later in the day.

“It’s a victory for Indian farmers and farmers of the developing world. It is also recognition of the right of developing nations for public stock-holding of food grain to ensure food security for their citizens,” Sharma said.

Sharma said, “It’s a path-breaking decision...This is the first major agreement that has been reached ever since the WTO was established.

“The previous agreement based on the Uruguay round was inherently imbalanced and flawed. The balance was against the developing countries and that is why support was mobilised and it became an imperative to launch a new round of negotiations, which is the Doha Development Agenda.”

The agreement will come as a booster for the WTO, which until yesterday had failed to make any headway with regard to the Doha round of trade talks, pending since 2001.

Officials in New Delhi said this was a breakthrough and had led them to agree to other clauses related to trade facilitation measures and trade sops for less developed nations.

“We had always supported measures for opening up trade to less developed countries, having ourselves unilaterally opened up duty free trade to such nations in South Asia,” said officials.

According to the draft agreement: “Members agree to put in place an interim mechanism... and (agree) to negotiate on an agreement for a permanent solution on the issue of public stockholding for food security purposes for adoption by the 11th ministerial conference.”

“All traditional staple food crops, without any numerical limit, will be covered under the decision...this decision provides legal certainty and also commits WTO members to work towards updating the rules under Agreement on Agriculture (AoA),” sources said.

The deal was clinched after WTO director-general Roberto Azevedo last night called a crucial meeting of key players, which continued till early morning. It was attended by Sharma, US trade representative Michael Froman and Indonesian trade minister Gita Wirjawan.

Developed countries such as the US and the EU wanted India to accept a peace clause, which offers four years of immunity from penalties imposed for breaching the farm subsidy cap of 10 per cent under the AoA.

India and other developing nations, on the other hand, wanted the peace clause until a permanent solution is found on the matter for the smooth implementation of the food security programme.

India had enlisted the support of developing countries with similar anti-poverty programmes to support its stand that food security could not be placed on a par with subsidies for farmers.

Sharma and his team had been in touch with India’s finance, commerce and external affairs ministries, besides the Prime Minister’s Office as well as negotiating support from other countries through back-channels.

Regarded as a major development in the farm sector since 1995, sources said India’s tough stand yielded results and the developed world had come around to its demand for flexibility in dealing with food security issues. Sharma had until yesterday maintained that it was “better to have no agreement than to have a bad agreement...”.

 
 
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