To resolve the impasse in the ongoing trade talks, World Trade Organisation Director General Roberto Azevedo, has called a meeting of all member group co-ordinators on Tuesday.

WTO spokesperson Keith Rockwell told Business Line , “In response to a surge of interest and concerns from Members about the future of our negotiations, the Director-General has organised a meeting of all group co-ordinators. He will outline for them what has happened and what efforts are under way to bring about a resolution to what has emerged as a real crisis here.”

He further said that the multilateral trade body will resume the discussion on formalising a trade facilitation agreement, which was abandoned last week after India refused to support it, if any country comes up with a proposal for generating consensus.

“If any delegation comes to the Chair (of the General Council of WTO) and says it has a proposal for generating a consensus, the Council will reconvene and a discussion will ensue,” he added.

No delegation has yet come forward with a proposed solution, Rockwell said. This could mean that WTO members will have to re-negotiate the deal, agreed to in the trade ministers meet in Bali last December, with fresh time-lines which is what India wants.

“In the absence of any proposal, at the stroke of midnight on July 31, the item will be considered closed and the General Council adjourned,” he added.

New Delhi maintains that supporting a trade facilitation pact will not be a problem if developed countries take seriously the proposals made by developing countries for fair treatment of food procurement subsidies and agree on a ‘permanent solution’, a Commerce Ministry official said.

Subsidy wrangle

India says its demand for fair treatment of food procurement subsidies is genuine and the solution is not complicated.

Since India’s Minimum Support Price (MSP) scheme (in addition to other subsidies) is subject to a cap of 10 per cent of total agriculture production at the WTO, it may soon be held guilty of breaching it once it fully implements its food security programme.

In case developed countries are able to prove that India has breached subsidy limits, it could be forced to discontinue/limit its MSP programme which would hit millions of poor farmers directly benefiting from the schemes and affect India’s food security programme.

One of the solutions proposed by the G-33 group of developing countries, of which India is an important member, is to remove the cap on subsidies given for food procurement. A second solution is to correct an anomaly in rules which could take care of the immediate risk of breach.

At present, the calculation of subsidies for MSP is based on 1986-88 fixed reference price, which inflates subsidies. The G-33 wants the reference price to be based on the existing market prices so that subsidy calculation is realistic.

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