Sunday, July 27, 2014

NDA2 to backtrack on India’s WTO commitment

New Delhi: India will not allow Trade Facilitation Agreement (TFA), which was agreed upon in the World Trade Organisation (WTO) ministerial at Bali in December 13. The TFA has to be implemented by the end of this month.

The BJP-led NDA government says that the UPA did not hold ground and made India’s agricultural subsidy regime vulnerable and that until guarantees are ensured on this count, there is no question of going ahead with TFA.

A senior governmental source explained that with the developed countries like the US and the EU giving billions in farm subsidies and their failure to scale them down as agreed upon, it would be unreasonable to object to the minimum support price (MSP) that the Indian government offers to farmers is “distorting” market prices.

The BJP is also of the view that then Union commerce minister Anand Sharma had yielded ground too easily and it compromised India’s farm interest.

This will be the first major break between NDA2 and UPA2. When the UPA came to power in 2004, the Manmohan Singh government stuck to the position taken by the earlier NDA government of Atal Bihari Vajpayee. DMK’s Murasoli Maran, who was the commerce minister then had stood his ground in what had come to be known as the Doha development round and refused to allow issues related to agriculture to be brought on the WTO agenda.

The Bali agreement gave India time till 2017 to continue with its food security policies in exchange for TFA to be implemented. India feels that once TFA is gone through, the issue of agricultural subsidies will be brought up again. Therefore India wants to use the TFA as a bargaining counter.

Interestingly, it is not just the developed countries like the US which had objected to India’s food subsidies at Bali but also other developing and rice-exporting countries like Thailand, Pakistan and Uruguay.

The Bali agreement which was clinched after tough negotiations which went into an extra day was seen then as a breakthrough after the Doha deadlock. The TFA is seen as the right move to boost global trade by making customs operations at airports and ports simplified and efficient.


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