India wants global trade rules to be amended so that developing countries can have higher farm subsidy limits to fund food security programmes.
And it is going all out to convince the US not to challenge its efforts to change those rules.
Prime Minister Manmohan Singh is expected to take up the issue with US President Barack Obama during their meeting later this month.
At the same time, Commerce Minister Anand Sharma will continue talks with top officials in Washington, a Commerce Department official told
Trade pact
New Delhi could make its support for a US initiative on a trade facilitation agreementat the World Trade Organisation (WTO) contingent on US backing for its efforts to amend farm subsidy limits, the official added. The US move is aimed at speeding up movement of goods across borders.
India’s Permanent Mission at the WTO, too, has been instructed by the Government to intensify its engagement with the US Mission and get its backing.
India and several developing countries, including China, Pakistan and Indonesia, have proposed amendments to the Agreement on Agriculture at the WTO to remove limits on public stockholding and food aid. These countries, which are part of the G-33 bloc, want the amendments to be made at the WTO Ministerial meeting in Bali this December.
Fears of breach
New Delhi is apprehensive that once its new legislation on food security, which promises subsidised foodgrain to about 70 per cent of the population, is implemented by all States, it will breach the WTO’s subsidy limit for members. This will leave India open to penalties under WTO rules.
The Agreement on Agriculture allows WTO members so-called ‘market distorting subsidies’ up to a limit of 10 per cent of total production.
“While several developed members, including the European Union, are considering the G-33’s proposal sympathetically, the US has been opposing it under one pretext or the other,” said the Commerce Department official.
During his discussions with the US President at the forthcoming WTO Ministerial meeting in Bali, Prime Minister Singh is likely to emphasise that India cannot compromise on food security.
Sharma met the US Trade Representative in Brunei last month to pitch for a positive and balanced outcome from the Bali Ministerial that benefits both countries.