WTO ignores India’s special safeguard measures pact demand

India’s demand for an agreement on a special safeguard mechanism (SSM) to protect poor farmers against import surges at the on-going World Trade Organisation’s  trade ministers meet in Nairobi was ignored in the first informal draft text on agriculture circulated by the Ministerial facilitator for agriculture on Thursday.

On food security, the second issue of relevance to India, the draft does not go beyond the ‘peace clause’ already in place and mentions accelerating work on a ‘permanent solution’ (for treating public distributing subsidies in a way that they are compatible with WTO rules) without actually mentioning a date and making it open-ended. In the last Ministerial meet in Bali, it was decided to have a permanent solution by 2017.

On the other hand, in the area of export competition pushed by a number of developed and agriculture goods exporting countries, the draft is more definite and talks about specific commitments on elimination of subsidies.

The text, unofficially floated by the ministerial facilitator, will go through intense negotiations and several rounds of editing before it is in a shape to be incorporated in the final ministerial declaration.

Despite India demanding specific commitments on the SSM, the text just talks about work on the SSM for developing countries being pursued at the WTO without any mention of the structure and by when it would be delivered.

Moreover, the text mentions pursuing work on SSMs in the context of agricultural market access which could make it difficult for developing countries to make use of it in the absence of additional lowering of tariffs on farm items, points out Ranja Sengupta from Third World Network.

“The text links SSMs to agricultural market access which could mean that it would be available only as part of larger discussions on market access which aims to further lower agricultural tariffs. India, as part of G-33, was looking at an SSM independent of anything on the lines of the special safeguards that several developed countries have,” Sengupta told BusinessLine.

New Delhi is expected to oppose the draft as it does not address its interests in the area of SSM while going forward on an agreement on export competition under which all countries would have to dismantle their export subsidies.

As per the draft, developed members shall eliminate their remaining scheduled export subsidy entitlements by the end of 2020 with 50 per cent happening by 2010.  Developing members, on the other hand, shall eliminate their export subsidy entitlements by reducing to zero their scheduled export subsidy budgetary outlay and quantity commitment levels in equal annual instalments by the end of 2023.

What would affect India is a particular provision in the draft that lay down that developing countries will have to do away with the transport and marketing subsidies, currently allowed to them, by 2028. India has been lobbying for a longer time-frame for its dismantling.

India’s refusal to accept restrictions on the functioning of its agriculture state trading enterprises has been respected with the draft not putting any mandatory disciplines in place.