India faces headwinds at WTO over food security, farm, trade demands

Geneva: Top officials from India’s commerce ministry lobbied hard last week to ensure tangible outcomes in agriculture and services at the World Trade Organization (WTO) ministerial meeting in Buenos Aires later this year, several trade envoys familiar with the closed-door meetings said.

India, however, encountered strong headwinds from major industrialized and some developing countries for its demands to find a permanent solution for its public stockholding programmes for food security, special safeguard mechanism for millions of farmers from unforeseen surges in agricultural imports, and an agreement for removing bottlenecks for facilitating trade in services, the envoys said.

During several meetings with important delegations and the WTO director general Roberto Azevedo, India’s chief trade negotiator Anup Wadhawan, WTO ambassador Anjali Prasad and new trade-envoy designate J.S. Deepak, made a strong pitch to secure credible outcomes on the three issues.

India underscored the need for a watertight covered agreement on the stockholding programmes of all G33 countries through an amendment to be incorporated into the WTO’s agreement on agriculture.

The G33 coalition of developing countries led by Indonesia, in which India plays a leading role, had offered—first in July 2014 and then in December 2015—several options to arrive at a permanent solution, including a new paragraph to cover market price support programmes for food security in the so-called green box of the WTO’s agreement on agriculture that are exempt from any subsidy reduction commitments. The G33 had also suggested modifying rules to address the historical inequities in the existing WTO’s agreement on agriculture. The developing country coalition had also proposed price and volume triggers to using special safeguard mechanism to curb unforeseen imports of farm products. But the two proposals faced vehement opposition from the US, the European Union, Canada, Australia, Pakistan, Thailand, Brazil, and Paraguay, among others, on grounds that they will not allow green box treatment for public stockholding programmes for food security.

On Friday, at a meeting of 27 trade envoys convened by the WTO director general on public stockholding programmes for food security, Canada, Pakistan, Paraguay, the EU, and Norway, among others, reiterated their objections.

Canada, for example, suggested that the G33 options for the permanent solution for public stockholding programmes for food security based on including market price support programmes in the green box amount to a carte blanche—implying unrestricted power to act on one’s own discretion, according to people present at the meeting.

Pakistan opposed the G33 demands on grounds they would lead to unsustainable production. The EU said a carte blanche approach for public stockholding programmes would not work, suggesting that the permanent solution must be based on the existing interim solution that was agreed at the Bali meeting.

The US said it doesn’t have the political guidance to comment yet but cautioned any solution for public stockholding programmes that takes things backwards will not be helpful, according to a trade envoy from South America who asked not to be quoted.

In response, Indonesia’s trade envoy Sondang Anggraini said, “The existing provisions on public stockholding purpose under current WTO rules will not be able to address the real need of developing countries to effectively support their low-income or resource-poor farmers, nor to fight hunger and rural poverty.”

“The (existing) WTO pact on agriculture doesn’t give adequate policy space for developing countries,” she said.

As regards India’s latest proposal on trade facilitation for services, the Indian team faced sharp questions and sceptical views during two separate meetings on Tuesday and Thursday.

During the regular WTO Council for Trade in Services meeting on Thursday, India enumerated the central features of its draft legal text on areas outside the domestic regulation disciplines such as cross-border services in Mode 1, consumption abroad in Mode 2, and several issues concerning improvements in the movement of natural persons in Mode 4.

India’s draft legal text includes a range of issues such as transparency-related provisions, administration of measures such as single window clearance, fees and charges, administration of economic needs tests, cross-border insurance coverage for promoting medical tourism in Mode 2, and provisions facilitating movement of natural persons (grant of temporary entry, multiple entry and social security contributions) in Mode 4.

New Delhi’s Trade Facilitation for Services draft text drew sharp responses in the form of questions, even from India’s traditional supporters from Africa. They sought to know how India could come up with a proposal for negotiating a stand-alone agreement on Trade Facilitation for Services without any mandate at this juncture, according to participants at the two meeting.

At a time when India is opposing attempts by major industrialized and some developing countries to launch negotiations in electronic-commerce without a mandate, it was not proper for New Delhi to demand negotiations on Trade Facilitation for Services, said a developing country trade envoy, who asked not to be quoted.

The Indian proposal was also challenged by major industrialized countries on grounds that it would impose commitments in areas such as data flow of information, portability of insurance in Mode 2, and social security payments and economic needs tests in Mode 4 among other issues. Canada, the EU, and several others drew red lines on issues concerning immigration, free data flow of information, portability of insurance for medical tourism, and social security payments among others.

The Indian Trade Facilitation for Services proposal faced “difficult and sharply different questions from different members,” the envoy said.