Shadow at WTO as India stands firm on food security

NUSA DUA, Indonesia - Agence France-Presse

Activists shout slogans during a protest against WTO in Bali, Indonesia. AP photo

India said on Wednesday that it could not accept a World Trade Organization proposal on food security, casting a cloud over a conference tasked with reviving faltering efforts to liberalise world trade.

A proposal that New Delhi feels could endanger its efforts to subsidies food in the huge nation “cannot be accepted”, India’s commerce minister Anand Sharma told his counterparts on the Indonesian resort island of Bali.

“Agriculture sustains millions of subsistence farmers. Their interests must be secured. Food security is essential for four billion people of the world,” he said.

“Yes, we have rejected it,” he later told reporters, calling it a “final decision”.

His comments appeared to imperil WTO chief Roberto Azevedo’s hopes that delegates can agree on a modest package of measures to keep alive the multilateral organization’s stumbling 12-year-old drive to slash trade barriers.

“I am an optimist by nature, but today I must admit I am in a somewhat sombre mood,” EU Trade Commissioner Karel De Gucht told reporters.

One by one, delegates to the four-day conference warned that Bali could be the last chance to rescue the WTO’s vision of an open trading environment fair to both rich and poor countries.

“Leaving Bali this week without an agreement would deal a debilitating blow to the WTO as a forum for multilateral negotiations,” said US Trade Representative Michael Froman. “And if that happens, the unfortunate truth is that the loss would be felt most heavily by those members who can least afford it.”

The WTO launched the “Doha Round” of talks in Qatar in 2001, seeking to overhaul the world trading system by setting a global framework of rules and tearing down barriers.

But protectionist disputes between rich and poor countries - as well as the WTO’s insistence that an accord be unanimous - has made a deal frustratingly elusive.

Meanwhile, alternative regional pacts between major trading nations including the 12-nation Trans-Pacific Partnership pushed by Washington have emerged, threatening the WTO with obsolescence.
Azevedo has said it would be “tragic” if such arrangements carry the day since they cannot protect the interests of the world’s poorest countries - a key WTO objective.

Chances for success in Bali have increasingly centered on India’s position on food security.
India passed a landmark National Food Security Act in August that will expand the buying of grain from farmers at subsidized rates, and sell it to consumers at prices reduced even further.

Facing tough elections next year and pressure from powerful farmers’ unions and opposition parties, the Congress Party government has hardened its stand on the issue.

It fears that a WTO rule limiting subsidies to no more than 10 percent of agricultural production could threaten its efforts to provide cheap food for its hundreds of millions of poor.

The Bali package would exempt India from any WTO challenges on subsidies for about four years, but New Delhi wants a blanket exemption until a permanent solution can be negotiated.

Pulling back from the Doha Round’s lofty goals, the “Bali package” being considered this week focuses on a handful of specific issues including the agricultural subsidies, proposals to simplify customs procedures, and measures to aid least-developed countries.

The WTO hopes a modest agreement can keep Doha on life-support for a later push.
“Right now I fear the opposite is true. The storm clouds of failure are right on us. Ladies and gentleman, this is crunch time for the WTO,” said De Gucht.

Delegates on Wednesday called for intensified efforts in Bali to bridge gaps, but no new proposals were made public.

Various estimates say the broader Doha Round could create tens of millions of jobs and perhaps $1 trillion in new economic activity.