Ending Bali on a high

The Hindu Business Line, December 17, 2013

By Pradeep S Mehta/ Bipul Chatterjee
On the food security talks — so far, so good.

After months of intense negotiations in Geneva culminating in a ministerial conference, trade ministers finally delivered the Bali package. As India’s Commerce Minister, Anand Sharma, said: “A historic day for the WTO. India’s food security concerns are addressed.” Despite intense political pressure, India stood its ground and helped the global trade community deliver a ‘balanced’ package incorporating a number of development issues.

It was a deal limited to three specific issues of the Doha development agenda, being negotiated since 2001. The ministerial conference in Bali, Indonesia, was extended by a day to sort out last minute issues related to trade facilitation.

Long Road to Bali

At the last ministerial conference held in Geneva in December 2011, trade ministers decided that as the full package of the Doha development agenda was not making much progress, it would be wise to concentrate on select issues. With the global economy and international trade changing rapidly, there were too many pushes and pulls. Earlier this year, it became clear that the limited Bali package would consist of some aspects of agriculture negotiations such as public stockholding for food security purposes, further liberalisation in the administration of tariff rate quotas; trade facilitation; and a number of issues important for trade-related development and further integration of least developed countries into the global trading system.

Much of the ground work for this outcome was laid in Geneva, led by the immediate past Director-General of the WTO, Pascal Lamy. The new Director-General Roberto Azevedo pushed the cause after he took over this September. India played a constructive role in articulating its demands vis-à-vis the Bali package.Without making any political compromise to its food security concerns and with a commitment to reducing the cost of doing cross-border trade, India clearly demanded that it wanted a balanced Bali deal.

Given the amount of subsidies that India provides to the producers of staple foods through minimum support price programme — such a subsidy is needed to implement a substantially universal food security programme to benefit consumers — the country was at the risk of breaching its WTO-compatible limit of domestic subsidies to agriculture. The Bali ministerial decision on ‘Public stockholding for food security purposes’ firmly established the need for and the modalities of arriving at that ‘permanent solution’ within a period of four years.

“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 …” This was the much talked-about ‘peace clause’. What Next?

For a permanent solution, the best approach would be for trade negotiators to arrive at a formula for calculating such subsidies. In the process, this should not open the door for recalculation of other kinds and purposes of subsidies to agriculture.

Not only will India have to take lead in this, it also has to play a constructive role in ensuring ‘delivery on development’ of the Bali package as a whole. It must also help other poor countries to do so as the delivery on ‘trade facilitation’ has to be like that of a regional public good. Further, India must also help the least developed countries get more and better benefits out of the implementation. India has always articulated its concerns and demands in a constructive manner. Bali has proved that, once again.

(Pradeep S. Mehta is Secretary-General, of CUTS International. Bipul Chatterjee leads CUTS on trade policy issues)

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