Putting its foot down, India has reportedly blocked the World Trade
Organisation's (WTO) trade facilitation agreement (TFA) which was
largely agreed upon in Bali last year. Lowering global trade barriers,
decreasing import tariffs and agricultural subsidies were some of the
provisions which were discussed last year by the 160-member WTO members
in Ninth Ministerial Conference. India has its concern about food
subsidy and stockpile of food grains and wants it to be addressed first
before signing the TFA. TFA is largely seen as an effort by developed
countries to access vast markets of new growing economy of the
developing country. Before jumping to conclusion about whether India is
doing right by opposing the TFA agreement or not, we should look at
these issues first. What is TFA and controversy surrounding it? • Trade
facilitation agreement (TFA) is a trade protocol aiming to give a spur
and do away with the stumbling blocks in doing international trade
between various countries. • The deadline to sign the agreement is July
31 and the deal has to come into force fully by 2015. • It is being
believed, especially by the proponents of the agreement that deal could
add $1 trillion to global GDP and also can generate 21 million jobs by
slashing red tape and streamlining customs. • The developing country
especially India and South Africa wants that before pushing for this TFA
thing why WTO don't discuss and allay our concern on food subsidy which
is a lifeline for lakhs of BPL people in these countries. What was
agreed upon in Bali summit? • Last year in Indonesia, during Ninth
Ministerial Conference, largely three issues were taken into account. •
They were Package for Least Development Countries (LCDs), Trade
facilitation and agriculture. • In the meeting, the 160-member WTO had
reaffirmed their commitment for duty free and quota free market access
for LCDs. Reactions on the issue: • Michael Froman, US trade
representative told Reuter, "India clearly and forcefully expressed its
concern that work proceeds on all fronts, including food stockpiling,
and received assurances that all G20 members are committed to the full
implementation of all Bali agreements on the agreed timetables". •
"India is quite influential, so let's hope that they're going to back
down in some way," Peter Gallagher, an expert on free trade told
Reuters. • When asked about the issue, an Indian official told Business
Standard, "The way things are moving, there is no way we can agree to
the trade facilitation agreement being pushed by the developed nations
at WTO within the prescribed deadline. Food security has always been
India's main concern and this time we are not going to concede". •
According to the Indian Express report, Commerce secretary Rajeev Kher
through a statement said that it will be really difficult for India to
sign the TFA till WTO members are ready to discuss a permanent solution
of food subsidies and stockpiling of food grains. India's concern •
India is maintaining its bullheaded approach because of two issues, food
subsidies and stockpiling of food grains. • India at present is running
a massive food procurement programmes by providing minimum supporting
price to the farmers and giving subsidised food to lakhs of BPL families
through its public distribution system (PDS). • The new WTO agreement
limits the value of food subsidies at 10 percent of the total food grain
production. India is flexing muscle on the issue because subsidies have
been calculated by WTO taking 1986 as base year into account which will
largely affect food procurement programme through MSP. • India is
raising its concerns by saying that while US is providing 120 billion as
agriculture subsidy then why India can't give even one tenth (USD 12
billion) to their farmers. • India which is home to about 25 percent of
the world's hungry, has a viewpoint that it is a Government's
responsibility and duty to ensure availability of proper food to its
people. • Moreover, India's food programme is largely domestic so it
doesn't distort global food trade. The Indian sources say that once the
TFA will be implemented it will be difficult to bargain on the food
subsidy thing and that is why India has this brazen attitude. What is
India's strategy? • India wants that its concerns on food security
issues must be addressed by adopting some concrete framework in the
direction. • India might delay on the signing of the agreement and buy
out time till December of this year.
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