The Bali Ministerial Conference has agreed on an interim measure for the most important issue of food security which affects millions of India’s poor. This measure would be in place for a period of four years by which time a permanent measure is promised to be negotiated. Thus, India has agreed to the so-called “peace clause” offered by the developed countries as a bait for trade facilitation agreement which they badly needed.
Before the Indian negotiators left for the meeting at Bali, the Government declared that our food security programme was a non-negotiable. But it ended up doing precisely the opposite in this meeting. After this agreement, our food security programme has become more vulnerable to interference by the WTO member countries. There would be greater international scrutiny because of the strict compliance norms stipulated by the WTO. There would be external pressures to adjust and size the public food stockholdings in India .
The clause 4 under the heading “Anti-Circumvention/Safeguards ” in this agreement reads ”Any developing Member seeking coverage of the programme under paragraph 2 shall ensure that stocks procured under such programme do not distort trade or adversely affect the food security of other members”. This clause prima facie is very mischievous and loaded against India. It has the potential to expose India’s food security programme to a host of challenges. It may extend to issues such as who should be regarded as poor in India , what should be the nutritional support that should be extended to such poor people, what should be the quantum of subsidy that should be given and many other related issues . These are the issues on which the Indian Parliament legislated recently with bipartisan support. Now through the Bali agreement, the Indian Government has allowed the international community to call into question various aspects of the legislation on Food Security approved by the Indian Parliament.
Clause 6 of the agreement makes it binding upon India to hold consultations with other members whenever requested about the operation of the public stock holding programme. As a result, India has taken a binding commitment for international scrutiny.
While on the one hand we have been told that India would not accept any restrictions on how it runs its food security programme, the agreement contains many open ended clauses that confer unbridled powers on all other WTO members to scrutinise , question and force us to right-size our food security programme. The powers to decide what is right for the farmers and the poor people of the country would no longer reside in the Indian Parliament. It would be dictated by what the rest of the world perceives to be right.
India’s request for calculation of subsidies at current prices have not been accepted. Thus the base figures of 1986-88 would form the basis for calculating subsidies. This would severely limit the quantum of our subsidies considering the current price levels compared to those in 1986-88.
What has India got in return for having compromised on the right to food of the people of this country ? The trade facilitation agreement was always the demand by the developed countries. They want better infrastructure, better customs procedures so that their goods can move across borders smoothly. India’s share in international trade is just about 1.6%. India needs better trade facilitation to increase its share to a more respectable level. But developed countries controlling more than 80% of world trade needed this agreement more than us. The negotiating space to demand something in return for this agreement belonged to India. We haven’t made the most of it. To add insult to the injury, while the commitments under the trade facilitation agreement are binding on the developing countries, the much needed financial and technological support from the developed world is at their mercy.
The WTO launched the Doha Development Round with the objective of an ambitious reduction and eventual elimination of trade distorting subsidies and creating a fair international trade regime. It urged all Members to raise their level of ambition. It wanted the agreement on the principle of “single undertaking” so as to ensure that the high level of ambition achieved. Successive rounds of negotiations have failed because the developed world have dragged their feet on the issue of reduction commitments on high level of subsidies in agriculture. Now the much-vaulted principle of single undertaking has been given the go-by as the West is unwilling to deal with its bloated subsidy programmes. It has therefore forced an agreement on trade facilitation which helps its goods and services to reach the shores of developing countries. It has gained better market access without conceding on its subsidy programme. India should not have accepted anything less than total exemption from any challenge to its food security programme under the AOA. By agreeing to the peace clause in this form as a temporary measure, India has given up its right to negotiate for a total exemption on a permanent basis.
Simon Evenett,, Professor of Internationals Trade at the Swiss University of St Gallen rightly observed ” The food security fix is something out of 1984. George Orwell would be proud”.
Indeed, the agreement proves that some are more equal than others.