Poor farmers in India and other developing countries are unlikely to secure credible outcomes for public stockholding programmes for food security and a special safeguard mechanism (SSM) at the Nairobi ministerial meeting of the World Trade Organization (WTO) next month as major industrialized countries have asked the chair for the Doha agriculture negotiations to drop his technical consultations, according to people familiar with the development.
India, along with its other allies in the G-33 farm coalition, has demanded that the Nairobi meeting find a permanent solution for public 0stockholding programmes for food security and the SSM for curbing unforeseen surges in imports of food products.
The G-33 has also tabled concrete proposals on how to arrive at credible solutions to these two major issues for developing countries.
Last month, Prime Minister Narendra Modi told African leaders about securing a permanent solution on public stockholding programmes for food security and an SSM.
But powerful countries such as Canada, the US, the European Union, Japan and Australia, among others, apparently told the chair not to proceed with his technical consultations based on the proposals tabled by the G-33. These countries want the chair to focus only on issues in the export competition pillar, according to a trade envoy who asked not to be identified.
Issues in the export competition pillar that the industrialized countries are pitching for include elimination of export subsidies and strong disciplines for removing the distorting elements in the export credits, food aid and state trading enterprises.
While the industrialized countries demand outcomes only in the export competition pillar at the Nairobi meeting, they have not tabled any concrete proposals until now.
Even though negotiations at the WTO proceed on the basis of concrete proposals, the proponents seeking solutions on export competition pillar have not come up with anything in writing till now, the envoy said.
Moreover, the US is seeking special flexibility, such as a safe harbour provision for export credits to get protection from possible legal challenges from the agreement on subsidies and countervailing measures.
The US also doesn’t want strong disciplines for food aid, particularly in-kind food aid monetization provisions.
Incidentally, the US denied the safe harbour flexibility to India on the public stockholding programmes for food security last year despite New Delhi’s repeated requests.
Despite intense pressure on the chair to stop his work on SSM and public stockholding programmes, Ambassador Vangelis Vitalis of New Zealand is going ahead with his efforts to ensure that there is a credible process in which both sides present their positions on the merits of the proposals instead of stonewalling discussions on extraneous considerations, the envoy cited above said.
During the meeting on the SSM last Friday, Indonesia on behalf of the G-33 presented a revised proposal stating that “there is no substitute to an accessible and effective SSM” which is “necessary to effectively address destabilizing import surges and price depressions caused largely by unbridled subsidization and other distortions”.
“SSM is all the more necessary as Members further delay reforms needed to make a serious dent on, if not totally eliminate, trade distorting subsidies to production and exports that are unduly penalizing developing Members,” the G-33 argued.
It called for exploring an outcome based on certain principles such as the coverage of products, remedies and application and duration of an SSM. In short, the SSM involves applying an additional import duty to address the injury caused by unforeseen imports.
At the meeting, several major industrialized economies—the EU, the US, Australia, and Norway—as well as some developing countries such as Chile, Paraguay and Brazil severely opposed an outcome on SSM at the Nairobi meeting. While the EU maintained that there is no need for an outcome on SSM at Nairobi as issues in market access are not discussed, Chile said the SSM is a red line.
The US said while in Trans-Pacific Partnership it would cut tariffs on 18,000 products, SSM would lead to an increase in tariffs.
The US asked the G-33 coalition whether it would block an agreement at Nairobi because of the SSM, according to a participant familiar with discussions at the meeting.
Indonesia, the Philippines, China, Turkey, and India expressed concern at lack of “engagement” to find a meaningful outcome on SSM. India’s trade envoy Anjali Prasad severely criticized her counterparts for “stonewalling the discussion” without entering into a give-and-take discussion. She asked if some members want to discuss SSM after Nairobi then, were they prepared to discuss export competition pillar after Nairobi, the participant said.
In his eight-page restricted report circulated to members last week, reviewed by Mint, Vitalis said “while we may have a (rather unfortunate) increasing clarity on the issues (or even pillars) that may not be part of the MC10 deliverables, the situation with what actually would be deliverable for Nairobi needs to be clarified urgently.”
