India and the US reached a compromise on issues relating to food security and trade facilitation at the World Trade Organisation (WTO), which could soon lead to a resolution of the current impasse in global trade talks.
However, neither country shared the finer details of the agreements. US Trade Representative Michael Froman said the bilateral agreements were a result of discussions between President Barack Obama and Prime Minister Narendra Modi.
Commerce and Industry Minister Nirmala Sitharaman, who said an agreement has been reached with the US, ducked questions on whether Washington had agreed to concessions over and above an indefinite continuation of the ‘peace clause’, which it had already agreed to last month.
“These are details that we will share with the General Council of the WTO when it meets next month. We don’t want to disclose them here,” she told reporters here on Thursday.
Subsidy caps A peace clause is an undertaking that action won’t be taken against a member for breaching agriculture subsidy caps (fixed at 10 per cent of production) till the formula for calculating such subsidies is re-worked. The concessions, which India had been pitching for, include dropping the condition that the tool can be used only when subsidies are non-trade distortive and on submission of data.
Sitharaman made it clear that India was pleased with the compromise.
“We are extremely happy that India and the US have successfully resolved their differences relating to the issue of public stockholding for food security purposes in the WTO in a manner that addresses our concerns. This will end the impasse at the WTO and also open the way for implementation of the Trade Facilitation Agreement,” she said.
India had refused to support a protocol on trade facilitation — a pact to ease movement of goods between borders by upgrading infrastructure and improving processes — on July 31, as agreed to in Bali last December, as it wanted a better deal on food security.
For a permanent solution New Delhi had demanded that, as a permanent solution, the subsidies should either be dropped from the list of trade-distorting subsidies, calculated on a more recent base year (as opposed to existing base year of 1986-88), or indexed to inflation.
The agreement between the US and India also sets out elements for an intensified programme of work and negotiations to arrive at such a permanent solution, the US Trade Representative’s office said in a statement.
Congress’ charge Congress leader and former Commerce Minister Anand Sharma said: “We have not been holding any bilateral negotiations on this issue. Then, how can the Government hold a bilateral meeting and claim that issues have been resolved? It has to be discussed in a ministerial conference.” At the WTO’s Bali ministerial, Sharma had negotiated that a permanent solution should be found latest by the eleventh ministerial scheduled in 2017. “We had ensured that India’s interests will be protected. I do not think there is any change in the position,” Sharma told BusinessLine .