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India, China and Cuba have joined hands at the World Trade Organization (WTO) to demand inclusion of subsidies for food procurement and food-aid programmes in the list of permissible incentives.
New Delhi has refused to give its consent to a trade facilitation protocol being pushed by several developed WTO members, such as the US, Australia and the EU, till there is a permanent solution on public stockholding.
In an informal meeting of the WTO’s agriculture panel this week in Geneva, the three countries said a proposal by the G-33 developing countries in November 2012 should be the permanent solution, a Government official told BusinessLine .
The proposal calls for an amendment to the Agriculture Agreement of the WTO so that price support for public procurement and food aid in developing countries — to benefit low-income farmers or those who lack resources — is considered ‘Green Box’ and allowed without limits.
At present, food procurement subsidies are categorised as trade distortive subsidies, which could attract sanctions from other countries on breaching the cap of 10 per cent of value of agriculture production.
Taking a hard lineThe position taken by India, China and Cuba on a permanent solution can be interpreted as a hard one, as the proposal to include price-support subsidies in the ‘Green Box’ was not entertained by several developed countries at the meeting of trade ministers of WTO member countries in Bali last December.
The Bali Package, therefore, allowed developing countries “interim relief” against action by other countries on breaching subsidy limits till a permanent solution was found by the next Ministerial meeting in 2017.
In return, developed countries (and some developing ones such as Mexico and Hong Kong) got all members to approve a trade facilitation agreement to improve movement of goods across the border.
India, however, is not happy with the ‘interim relief’ as it would need to submit numerous documents and still be open to challenge on the ground of trade distortion.
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