Category: WTO agreements

Hobson’s choice on farm subsidies

The Government may consider DBT to farmers; India can give it without any cap and yet remain compliant with its commitment under the WTO At the Trade Policy Review (TPR) meeting held at the World Trade Organisation (WTO) in January, India insisted that a permanent solution for public stockholding to serve the food security objective special safeguard measures (SSMs) to prevent import surges and elimination of unfair farm subsidy entitlements of some members should be taken up on a priority basis for any farm deal that may be worked out at the 12th WTO Ministerial Conference (MC-12) scheduled to be held from November 29. For about two decades, India has been taking up at the WTO these core agriculture issues that are...
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Protecting agri-subsidies at WTO – ‘Hobson’s choice’

At the Trade Policy Review (TPR) meeting held at WTO (World Trade Organisation) in Geneva (January, 2021), the Indian delegation led by the commerce secretary, A Wadhawan insisted that (i) permanent solution for public stockholding to serve the food security objective; (ii) special safeguard measures (SSMs) to prevent import surges and (iii) elimination of unfair farm subsidy entitlements of some members should be taken up first on priority for any farm deal that may be worked out at the 12th WTO Ministerial Conference (MC 12) scheduled to be held from November 29, 2021. Ever since the launch of Doha Development Round (DDR) (2001) (as the title suggests, this was meant primarily to address the issues of concern to the developing...
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Trade policy – India needs to open up

In a report on developments in India’s trade policy on the occasion of the seventh Trade Policy Review of India during January 6 – 8, 2021, World Trade Organization (WTO) has noted “export restrictions and import prohibitions imposed by India seem to be in contradiction with its main trade policy goal, of increasing its share of global exports from 2% in 2015 to 3.5% by 2020”. Four areas which have come under WTO focus are (i) high import tariff and frequent changes thereof, minimum import prices and other import restrictions; (ii) export taxes, export restrictions/licensing; (iii) frequent use of anti-dumping measures; (iv) high subsidies and need to reduce these to free up resources for investment particularly in development of the infrastructure....
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An unreliable shield

Since the subsidy given to rice farmers has exceeded 10 per cent, India has violated its WTO commitment and invoked the ‘peace clause.’ But how much immunity will this give to it? In a notification submitted to the World Trade Organisation (WTO) — the multilateral body which binds member countries to a common set of rules with regard to trade in goods and services with “fairness” and “non-discrimination” as its underlying principles — India has informed that the value of its rice production during 2018-19 marketing year was $43.67 billion and for that, it provided subsidies worth $5 billion. This works out to 11.4 per cent of the value of rice production. Under the Agreement on Agriculture (AoA) of the WTO, a...
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Peace Clause – unreliable shield against subsidy breach

In a notification submitted to the World Trade Organization [WTO] – the multilateral body which binds member countries to a common set of rules with regard to trade in goods and services with ‘fairness’ and ‘non-discrimination’ as its underlying principles – India has informed that the value of its rice production during 2018-19 marketing year was US$ 43.67 billion and for that it provided subsidies worth US$ 5 billion. This works out to 11.4% of the value of rice production. Under the Agreement on Agriculture [AoA] of the WTO, a developing country cannot give aggregate measurement support [AMS] – an acronym for subsidies in WTO parlance – in excess of 10% of the value of its agricultural production. The AMS...
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No big deal

Staying clear of the optics and bonhomie on display all through the US President’s recent visit to India , one gets a sense that the road to even a limited trade deal is thorny Prior to the maiden visit of US President Donald Trump to India, there was a sense of dejection about the possibility of the US and India signing even a limited trade deal, leave aside a major one. This is to be seen in the backdrop of the absence of United States Trade Representative (USTR) Robert Lighthizer from the delegation. Earlier, too, Lighthizer had cancelled a visit to New Delhi when he was scheduled to wrap up discussions on a trade agreement. However, the mood was buoyant at the...
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Trade deal – forget big, even mini unlikely

Prior to the maiden visit of President, Donald Trump to India [February 24 – 25, 2020], there was a sense of dejection about the possibility of US and India signing even a limited trade deal not to talk of a ‘big deal’. This is to be seen in the backdrop of the United States Trade Representative [USTR], Robert Lighthizer [the point man who has the onerous responsibility of formulating US trade policy and negotiating trade pacts with countries world-wide] not being part of the delegation. Earlier, Lighthizer had cancelled a visit to New Delhi when he was scheduled to wrap up discussion on a trade deal. However, on conclusion of the visit, the mood is buoyant. This was reflected in...
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Shed the protectionist mindset

Keeping in mind the criticality of being an integral part of the global supply chain to achieve a $5 trillion economy, India needs to reconsider its decision on RCEP The Regional Comprehensive Economic Partnership (RCEP) is a conglomeration of 10 members of the Association of South East Asian Nations (ASEAN) viz. Malaysia, Indonesia, Thailand, Vietnam, Singapore, The Philippines, Myanmar, Brunei, Laos and Cambodia plus six others viz. Australia, New Zealand, Japan, South Korea, China and India. If it really sees the light of day with all 16 members intact, the group will cover 3.6 billion people or almost 50 per cent of the world’s population and account for nearly 40 per cent of the global GDP (Gross Domestic Product). India is...
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RCEP – shed protectionist mindset

The Regional Comprehensive Economic Partnership [RCEP] is a conglomeration of 10 members of the Association of South East Asian Nations [ASEAN] viz. Malaysia, Indonesia, Thailand, Vietnam, Singapore, Philippines, Myanmar, Brunei, Laos and Cambodia plus 6 others viz. Australia, New Zealand, Japan, South Korea, China and India. If, it materializes [29 negotiation rounds have already been held since start in 2012], this will be a giant group covering a population of 3.6 billion or 50% of the world and GDP [gross domestic product] at US$ 25 trillion or nearly one-third of the global. During the Summit of ASEAN held in Singapore last year [November 11-15, 2018], prime minister, Narendra Modi had called for early conclusion of the process so that the...
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Join WTO e-com talks, have a say in global rules

As many as 76 members of the World Trade Organisation (WTO) — nearly half the WTO’s membership — have begun a process of framing rules governing cross-border e-commerce. The initiative is being spearheaded by the United States, China, the European Union and Japan — the four largest trading nations in the world economy — and has the tacit support of leading multinational companies (MNCs) in the e-commerce space such as Amazon, Walmart/Flipkart and Alibaba. India has strongly objected to the move. The objection stems primarily from an apprehension that in the event of India being a part of the negotiations, it will have to commit itself to harmonised WTO rules on e-commerce which will take away the ‘policy space’ currently...
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