With the US agreeing to a permanent solution to address India’s concerns about procurement for its food security programme, the main hurdle has ostensibly been cleared for the WTO to go ahead with the time-frame for signing the Trade Facilitation Agreement (TFA) and the public food stocking agreement simultaneously.
For India, it’s a moment of triumph as it had taken a determined stand that there would be no TFA without finding a solution to the food stockholding issue.
India’s stand was condemned by the United States and officials like John Kerry, who used harsh, threatening words that accused India of going back on her word and trying to derail the Bali Round of the WTO.
WTO director-general Roberto Azevedo was also critical of India. But India stood firm and had the support of the developing nations, who have an equal responsibility to their poor farmers and want to protect their food procurement schemes. Efforts were made, unsuccessfully, to isolate India.
In December 2013 the Manmohan Singh government had, knowingly or unknowingly, signed away the farmers’ interests and agreed to go ahead with the Trade Facilitation Agreement while leaving the public food stockholding issue in limbo for four years under a “peace clause”.
July 31 was the deadline to sign the Trade Facilitation Agreement and the developed countries moved swiftly to make it a reality by July 31. They will be the main beneficiaries as trade is expected to touch $1 trillion though this figure is questionable.
But, in July, the Modi government said there would be no Trade Facilitation Agreement unless a decision was taken to protect the government’s food procurement programme, the backbone of the food security programme.
The government’s stand, as projected by Union commerce minister Nirmala Sitharaman, was that in the months gone by the focus had been only on the Trade Facilitation Agreement and there had been no discussion on the food stocking agreement. It showed that the intentions of the developed countries were not above board.
According to WTO rules, subsidies to farmers are capped at 10 per cent of total food production at 1986-88 prices. India had been lobbying for a more realistic base as prices have gone up tremendously since then. But there was no agreement on this.
It is not known what the terms of agreement are between India and the United States on public food stocks holding. Ms Sitharaman would not disclose it and the United States also did not do so and stuck to normal platitudes.
The agreement has, however, been widely welcomed by the WTO director-general and it is presumed the European members will fall in line.
The next meeting of the WTO general council is slated for December 11-12. One will then know the fate of the much applauded agreement between the United States and India.
