India is unhappy with the compromise formula proposed by WTO Director-General Roberto Azevedo to build consensus on its demand to raise farm subsidy limits to meet food security needs.
New Delhi is unwilling to accept the wording of the proposed text, which states that protection against penalties for breaching subsidy limits — also called a peace clause — will be provided to developing countries for only four years.
After that, it will be “reassessed” on the basis of how it plays out, a Commerce Department official told
While the DG's text talks about initiating a work programme for a permanent solution to the subsidy problem faced by many developing countries, it does not link the peace clause to the solution.
“We are not ready to accept the terms of reassessment mentioned in the DG’s draft. If we leave it to members to decide at the end of four years, there is no guarantee we will finally be able to get WTO rules amended to accommodate our food procurement subsidies,” the official said.
Negotiating teams from WTO member countries are engaged in hectic parleying in Geneva. Time is running out as the package is to be delivered at the meeting of Trade Ministers in Bali, Indonesia, between December 3 and December 6. India, as part of the G-33 group of developing countries, is pressing for a change in the WTO’s Agreement on Agriculture (AoA) so that it accommodates the subsidies given for public procurement and also changes the 1986-87 price line for calculating these subsidies.
Under the AoA, subsidies on public stock holding for food security purposes fall under trade-distorting subsidies, which have a cap. The G-33 not only has a problem with the fact that these essential subsidies are marked as trade-distorting, but also believes that the way these are calculated lead to over-determination.