Home ECONOMY Indo-US deal ends WTO impasse on food stocks issue

Indo-US deal ends WTO impasse on food stocks issue


New Delhi, Nov 13:

Announcing an end to the impasse over the WTO accord to ease global customs rules, Commerce Minister Nirmala Sitharaman Thursday said an agreement has been reached with the US on the issue of food stockpiling.

Nirmala Sitharaman, BJP spokespersonThe deal opens the way for a consensus on the Trade Facilitation Agreement (TFA) which had eluded the World Trade Organisation members in July, she added.

India has asked for a permanent solution to the issue of public stockholding for food security purposes and not a restricted period of four years as was originally decided during the WTO ministerial meeting in Bali, Indonesia last year.

“Point of difference was there (with the US) that the Bali agreement was imperfect, which had to be corrected. It’s a course correction that we wanted,” Sitharaman told reporters here.

“We’re moving forward in a constructive manner,” she added.

The minister said many nations saw merit in India’s stand at the WTO and that the US has also “appreciated and now openly supported our concerns on public stockholding. India has never obstructed trade facilitation. We were only trying to safeguard our farmer’s interests”, she said.

India has been under pressure from several countries, particularly the US, to drop its objections to the Trade Facilitation Agreement.

India’s objections are on the WTO limits on agriculture subsidies at 10 percent of the total value of foodgrain production, and on stockpiling foodgrains. Complying with the country’s Food Security Act passed last year that guarantees subsidised foodgrains to around 70 percent of the population could result in breaching these limits leading to penalties for India.

At Bali, the ministers also agreed, by what is called the “peace clause”, that till 2017 no country can move the dispute settlement body of the WTO against another member if its government was found to be breaching the level of subsidy freeze that was permitted.

“Please extend the peace clause and find us a permanent solution. Do not make us wait till 2017. These are legitimate demands,” Sitharaman had said here Sunday.

Earlier, Finance Minister Arun Jaitley had said at a conference here that the peace clause due to disappear in four years time but India wanted “the decision on settlement of disputes and the peace clause should co-exist”.

“The WTO is in the best interest of developing countries, especially the poorest and most marginalised ones among them, and we are determined to work to strengthen this institution,” Sitharaman Thursday said in a statement .

“This (deal with US) will end the impasse at the WTO and also open the way for implementation of the Trade Facilitation Agreement,” she added.

Without making them public for the moment, Sitharaman urged the WTO members to take India’s proposals forward at the body’s General Council.

Commenting on the agreement with India paving the way for concluding the first multilateral trade agreement in the WTO, US Trade Representative Michael Froman said in statement in Washington: “On the basis of this breakthrough with India, we now look forward to working with all WTO members and with Director-General Roberto Azevedo to reach a consensus that enables full implementation of all elements of the landmark Bali Package, including the Trade Facilitation Agreement.”

“This has been a good week for trade and the growth and jobs it supports here in the United States. The US worked with China to achieve a breakthrough on the Information Technology Agreement, worked with India to move forward with the implementation of the Trade Facilitation Agreement, and worked with our TPP partners to bring the end of these landmark negotiations clearly into sight,” he added.

“We are pleased to know that India and USA have successfully resolved their differences on the issue relating to public stockholding for food security purposes. India’s position on this topic has been vindicated. Reconciliation of the difference between India and USA would also lead to resolving the impasse in WTO talks and open the way for implementation of the Trade Facilitation Agreement,” Federation of Indian Chambers of Commerce and Industry (FICCI) director general Arbind Prasad said in a statement here.