After intense negotiations, India has its way at WTO

Posted on Dec 6 2013 - 4:59pm by IBC News

BALI: After four days of intense negotiations, World Trade Organization members are set to accept the government’s demand on food security that will protect India and other developing countries from penalties for breaching the domestic support cap of 10% of value of production. In return, the government agreed to a new agreement on trade facilitation, the first since WTO was set up nearly two decades ago, that will ease controls at ports and airports.

The endorsement of the draft ministerial remains a formality as trade ministers are set to approve plan after almost 24 hours of behind the scenes dialogue.

For India the victory was particularly sweet as it managed to have its way despite major players China and Brazil backing out, leaving South Africa as the only major ally along with Argentina and some large African countries such as Kenya and Nigeria.

As demanded by India, developing countries will now be able to continue with their public procurement programmes without fearing a possible breach in the ceiling. A ruling in its favour will help the government roll out the food security law without any hurdles as procurement hiccups could have impacted the implementation of UPA’s flagship scheme.

“If the members approve it, it will be first breakthrough in agriculture and something that will benefit developing countries,” said a top Indian negotiator. In addition, there were other gains for the developing countries such as Brazil, China and India more competitive in international markets.

The trade facilitation agreement will, however, require major changes in Indian laws, especially the Customs Act, a quicker transition to electronic payments across ports and a special set of rules to speed up courier flow at airports.

While upgradation of ports and airports will require large investments, the government has turned down any assistance saying it is already improving infrastructure and can easily finance it.

To get the food subsidy benefits, the government will have to comply with conditions such as the support offered by it and if it is nearing the 10% limit. In addition, the benefit will be available to all crops.


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