India asks WTO members to constructively engage for permanent solution to food stockholding

NEW DELHI: India has asked the members of WTO to constructively engage in negotiations for a permanent solution to public stockholding for food security purposes, as committed in the ministerial conferences in Bali and Nairobi. According to statements delivered by Ambassador and Permanent Representative of India to the WTO, Brajendra Navnit, at the meeting of General Council of WTO on July 22-23, a permanent solution to the issue, which is simple and can be used by developing countries, would go a long way in addressing their genuine concerns relating to food security of the most vulnerable sections of the society.

Navnit said the current pandemic has shown how adversely the poor in developing countries are impacted, and developing governments have been struggling with the issues faced by the most vulnerable sections of the society, including agricultural farmers and labourers.

"India takes this opportunity to request the members to constructively engage in the negotiations in the issue of public stockholding for food security purposes, as committed in the ministerial conferences in Bali and Nairobi," he added.

In these circumstances, he said it becomes all the more important for the developing countries to have adequate flexibility in this area.

Under the global trade norms, a WTO member country's food subsidy bill should not breach the limit of 10 per cent of the value of production based on the reference price of 1986-88.

Apprehending that full implementation of food security programme may result in breach of the WTO cap, India has been seeking amendments in the formula to calculate the food subsidy cap.

As an interim measure, the World Trade Organization (WTO) members at the Bali ministerial meeting in December 2013 had agreed to put in place a mechanism, popularly called the Peace Clause, and committed to negotiate an agreement for permanent solution at the 11th ministerial meeting at Buenos Aires.

Under the Peace Clause, WTO members agreed to refrain from challenging any breach in the prescribe ceiling by a developing nation at the dispute settlement forum of the WTO. This clause will be there till a permanent solution is found to the food stockpiling issue.

On e-commerce issue, Navnit said that without clarity on the scope of moratorium on customs duties, there can be no predictability for business, trade and industry.

India had earlier asked the WTO members to urgently reconsider the continuation of moratorium on customs duties on e-commerce trade as the coronavirus pandemic has demonstrated the importance of retaining the flexibility to regulate such imports.

"More importantly, governments would not know what their obligations and rights are. Only a clear understanding on the scope and an appreciation of its impact would help the ministers take a well-considered and wise decision on the moratorium at MC12 (12th ministerial conference)," he added.

On the issue of 'Covid-19 Initiative: Protecting Global Food Security through Open Trade', he said export restrictions are a WTO-consistent policy tool that are important to prevent critical domestic shortages of essential supplies.

"Undoubtedly, it is important that these export restrictions are imposed with restraint and are temporary. In this context, I would like to inform the membership that India has not imposed export restrictions on any agricultural products during the Covid-19 pandemic," he added.

Further, he said India has underlined that special and differential treatment (S&DT) is a treaty embedded right at the WTO and it cannot be taken away based on certain arbitrary assumptions.

"In fact, S&DT should continue to underpin existing rules as well as current and future negotiations if members were to strengthen the negotiating function of the WTO," he added.

The basis of S&DT is to give members time and flexibility to integrate into the rules-based system and members with huge differences in economic and social development cannot be put in the same category.

"For instance, to put India, which has an annual per capita income of less than USD 2,500, in the same development category as the United States, with a much higher (may be 25 times) per capita GDP, would be unfair," he said, adding that there has been unilateral denying of S&DT treatment to developing countries even under the existing WTO agreements like those on subsidies and countervailing measures.

He also stated that certain recent actions fuel apprehensions that the ultimate objective of this submission is to ultimately terminate S&DT at the WTO altogether.

"To this end, a so-called case by case approach is being proposed, dependent on providing evidence of the need for S&DT, sector wise to start with, which will soon expand to requesting for and seeking S&DT, product by product and line by line.

"Such an approach will be so burdensome and impractical that it will make S&DT for developing countries and LDCs extinct and a part of the history of the WTO. We cannot allow this to happen and we urge the member to reconsider the proposal," he added.