Food for thought at Bali

During the run-up to the ninth WTO Ministerial at Bali (December 3-6), New Delhi has made firm statements about the primacy of the need to uphold the national interest. It has even held out the threat that the conference could fail if its concerns are not effectively addressed. At least, this is the impression one gets from the outcome of the meeting between the Prime Minister and the Union Commerce Minister last week, held to finalise New Delhi’s negotiating strategy.

The Prime Minister is reported to have told the Commerce Minister that under no circumstances could India be dictated to by the developed member-countries of the WTO regarding its food security requirements. The point was particularly made that India would “not agree to any deal at Bali until it is certain that the proposed interim solution will be available till a permanent solution to the issue of India’s minimum support prices breaching the WTO norms has been found and agreed to”. The Commerce Minister is reported to have commented: “The food subsidies under the Food Security Act we are not even discussing . . . that’s our sovereign space.”

The point at issue here is whether the agriculture subsidy threshold (

de minimis stipulation) of 10 per cent -- which would trigger the activation of WTO rules under the Agreement of Agriculture (Article 6) regarding domestic support of both the product-specific and nonproduct-specific variety -- will be crossed under the new food security initiative. The G-33, of which India is an active voice, wants this stipulation removed so that the operation of the new law is not disrupted in any way, the entire issue being close to the hearts of the Congress Party bigwigs in view of its populist impact on the electorate, specially in view of the forthcoming Lok Sabha elections.

Olive branch

As of now, the developed countries, which are strongly opposing the demand, are reported to have extended a temporary olive branch (in return for support on other aspects of the Bali Ministerial document), the thrust of which is that the operation of the

de minimis regulation would be kept in abeyance till the next ministerial meeting is held two years from now. In other words, there is nothing permanent about the concession that is being offered by the developed countries. The whole subject is likely slated to be resurrected in 2015 when, presumably, it will again be used by the developed countries as a negotiating point so that it get its way in other troublesome areas.

Clearly, New Delhi’s stand on the issue is commendable, but the critical point is: will it be able to stick to it in Bali? Hints are being dropped that the so-called “peace clause” will be valid for four years.

Point to remember

Admittedly, an immediate peace clause is important for New Delhi because of the Congress Party’s urgent need to be able to effectively operationalise the legislation as quickly as possible. But the point of principle involved, namely, a concessionary approach to look after the development needs of the world’s poor (excluding the LDCs) under the Doha Development Agenda must never be lost sight of.

This is the core element of the Doha Round which is being opposed by the rich countries, which is also the reason why the developing countries cannot ever be seen to be soft-pedalling on it. The entire controversy around the peace clause is just one more reminder that the road ahead is a tough one. The world’s poor cannot afford to let down their guard in their effort to traverse it.