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WTO's post-Bali plan may be govt's worry-Sidhartha
-The Times of India


NEW DELHI: With the general elections just four months away and rollout of UPA's flagship Food Security Act at stake, commerce minister Anand Sharma is facing a challenge that few of his eight predecessors who attended WTO ministerial meetings have faced.

Already, there is a demand to block a compromise formula or a "peace clause" that will prevent any WTO member from seeking penalties against a developing country for breaching the permissible limit of support. Developing countries such as India provide food subsidy by procuring grains at the minimum support price and selling them at subsidized rates through the public distribution system. Under the Agreement on Agriculture, such support cannot exceed 10% of the value of goods, and India faces the prospect to breaching the permissible support levels, especially after the implementation of the food security law. Although broad contours of the deal are ready, there are gaps on which the government is seeking a remedy.

For instance, a trade negotiator told TOI that the government wants clarity on what happens after four years, when the peace clause is scheduled to end. Similarly, the current formulation that the food stocks should not "distort trade" is ambiguous and can actually make matters worse than the current formulation.

"Obviously, we are going to get the two issues sorted out before we agree to the text," said an official. In a letter to political leaders, Sharma has assured that he will stay firm and protect national interest.

"The challenge is to ensure a permanent solution to food security. The key is to ensure that G-33 (the alliance including India piloting the food security plan) and the others have an incentive to come to a permanent solution," said Abhijit Das, who heads the Centre for WTO Studies at the Indian Institute of Foreign Trade.

Trade experts point out that so far the discussion has focused mainly on what happens at Bali, while Sharma and his team of negotiators would also have to grapple with the life post Bali. "What happens in the three areas food subsidy, trade facilitation and issues related to least developed countries) isn't going to make the WTO. This is a small agenda. We have to be very clear about what the elements post Bali are going to be," said Biswajit Dhar, director general of Research & Information Systems, a think tank.

So far, negotiations in Geneva have focused on Bali, with the draft ministerial declaration, expected later this week, going to outline the post-Bali plan.

"With less than 10 days remaining for the start of the ministerial meeting, no issues have been identified for the post-Bali agenda. So, it would be legitimate to expect that it will be confined to the remaining issues of the Doha Round," said Das. Even if it's the Doha Round agenda, the focus, before talks collapsed, was on completing negotiations on agriculture to lower import duties, while getting the European Union to cut subsidies. Then, there was the discussion around reducing import duty on industrial goods, even as the developed countries managed to push liberal visa regime and other elements of the services agreement out of the negotiating room.

So, the big challenge before Indian negotiators is to get WTO members to agree to move on all fronts, even as some of the large traders such as the US and EU are trashing the Doha agenda, arguing that they are outdated.

With an agreement on trade facilitation, which was not on the original work programme, almost ready, government officials fear that some of the so-called 21st century issues such as energy security, climate change and currency and their link with trade may be included as some of the developed countries are pushing hard. These are issues which even the emerging market economies such as India and China are uncomfortable with.

Although backroom simulations are underway, the government is not commenting on what will be the post-Bali agenda. What it is merely saying is that India's interests will be protected. "By agreeing to the food security plan, we may just have opened ourselves to agreeing to the post-Bali agenda," said the former commerce ministry official.