India moment in trade diplomacy: Bali package ensures food security

wto-bali-anandIndia has finally won, in this “war of nerves.” It has shown how the labyrinthine trade diplomacy can be made to deliver and uphold interests of the global underdog. After five days of intense negotiations, running beyond the original schedule, the trade negotiators has come out with the historic Bali Package defending the inalienable rights of the developing countries to food security and related public stockholding of food.

The WTO Director General Roberto Azevedo is perhaps the happiest man. “For the first time in our history: the WTO has truly delivered” since its inception in 1995, he said. This was possible due to India’s spirited strategy by taking up the onus of defending itself when its ambitious food security programme came under attack from the US and the European Union.

wto-bali-fromanSensing the fissures emerging within G-33, a coalition of 46 developing countries, India’s Minister of Commerce and Industry Anand Sharma missed no chance in networking with a wide range of developing and least developed countries, particularly the African nations and engaging with US Trade Representative Michael Froman, WTO DG Azevedo and the WTO Ministerial Chair and Indonesian Trade Minister, Gita Wirjawan. After apprising Prime Minister Dr Manmohan Singh twice on the developments, Sharma told the USTR Froman to seek a fresh mandate from President Obama to support the draft prepared by India that sought to protect its food security programme. The USTR found no other way but to oblige Sharma.

As soon as the Bali Ministerial started, Indonesia, the Chair of G-33 coalition, began to dither on the issue of food security as it thought that US would not budge from its stance and hence the ministerial will not be able to deliver. Even Pakistan tried to undermine India’s demand for food security concerns, saying that the procurement of food grains from farmers at minimum support prices (MSPs) and subsequent public stockholdings tend to distort global trade. This was expected as Pakistan belongs to both G-33 and the Cairns group that pushes aggressive trade liberalization in agriculture.

But Sharma was confident that no deal could be clinched without emerging economies like Brazil and China being on the top table. Sharma is justifiably elated. “It’s a war of nerves. It’s a historic first and a landmark for the WTO where India held firm not only for Indian farmers but all of poor and developing countries,” he said.

The emerging economies are increasingly shaping the global agenda, and they brought the full force of their solidarity at the Bali ministerial. Besides, Sharma’s networking skills with the developing and least developed countries, particularly the African nations, helped to make the 9th WTO Ministerial in Bali a historic one after the 4th WTO Ministerial in Doha in Qatar in 2001 that gave birth to Doha Development Agenda.

As per accord reached in Bali after the midnight of December 6/7, India and other developing countries will have no problem in rendering support to food security programme and farmers for four years even if its breaches the 10% cap in their aggregate measures of support (AMS) under the Agreement on Agriculture (AoA). This being an interim arrangement, the final decision on food security programme will be taken at the 11th WTO Ministerial. “Members agree to put in place an interim mechanism as set out below, and to negotiate on an agreement for a permanent solution for the issue of public stockholding for food security purposes for adoption by the 11th Ministerial Conference,” the draft said.

It further clarified:  “In the interim, until a permanent solution is found, and provided that the conditions set out below are met, Members shall refrain from challenging through the WTO Dispute Settlement  Mechanism, compliance of a developing Member with its obligations under Articles 6.3 and 7.2 (b)  of the Agreement on Agriculture (AoA) in relation to support provided for traditional staple food crops in pursuance of public stockholding programmes for food security purposes existing as of  the date of this Decision, that are consistent with the criteria of paragraph 3, footnote 5, and footnote 5&6 of Annex 2 to the AoA when the developing Member complies with the terms of this Decision.”

Apart from food security concerns, the Bali ministerial approved the Trade Facilitation Agreement that could infuse $1 trillion into the global economy by reduced transaction costs on account of streamlining custom procedures. Developing countries will be given financial assistance and adequate time for implementing these measures.

Concerns of small group of countries – Cuba, Bolivia, Nicaragua, Venezuela – about embargoes delayed consensus on the package until a compromise was struck in the form of a sentence upholding the principle of non-discrimination in goods in transit was added to the final declaration.

The Bali package focuses on various issues related to development, including food security in developing countries and cotton and a number of other provisions for least developed countries.

The package also includes a political commitment to reduce export subsidies in agriculture and keep them at low levels, and to reduce obstacles to trade when agricultural products are imported through quotas.

(The views expressed in this article are solely those of the author.)


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