In a landmark agreement, the World Trade Organisation (WTO) consisting of 159 member countries reached its first trade deal since its inception in 1995, marking a major victory for India as it was able to get its way on ensuring food security and minimum support price for its farmers.
The deal includes a trade facilitation agreement which aims at simplifying customs procedures and reducing transaction costs for goods and services. This pact is estimated to add $ 1 trillion to global trade and add 21 million jobs across the world.
The breakthrough at the Bali ministerial meeting of the WTO was reached after intense negotiations. At one point, given India’s strident stand on not compromising on the issue of food security, it looked like the talks would collapse.
India has ensured that countries will be allowed to provide subsidy on food crops without any threat of punitive action.
Commerce and Industry Minister Anand Sharma, who led India at the talks, described the decision as historic.for India. "India has played a major role in the revival and re-energising the Doha Round of talks. The Bali declaration is a positive step," Sharma was quoted as saying. The Food Security Act of India had cast a legal obligation on the government to assure the poor of supply of food grain and it was fighting to ensure that these obligations do not violate WTO rules.
As notified by India to the WTO, India’s support for rice and wheat is well within its 10 per cent limits on subsidy. However, in the absence of the protection that has now been agreed, there was imminent danger of breaching it in the near future.
Procurement at administered prices and the public distribution system are the main pillars of the National Food Security Act. In the absence of this decision, it is likely that India will breach its within the next few years.
The agreement today has ensured that millions of poor farmers will feel secure that the Minimum Support Price (MSP) being given by the government will not be called into question internationally and possible challenges under the WTO. This will be in place till such time a permanent solution is found by the WTO membership which alters the rules of business governing agricultural trade. According to the Indian delegation, it is for the first time in the history of WTO as an institution that an important issue relating to food security has been squarely addressed.
It is an acknowledgement of the felt need to rewrite the rules of agricultural trade and provide a balance for the developing countries.
The WTO text which has been agreed upon by the larger membership today marks a fair balance reflecting the aspirations of both the developed and developing countries. The Indian side okayed the trade facilitation agreement after seeing a balance in the agriculture package.
During the negotiations, India had remained firm and unwavering in its stand over the last three days which saw a softening of positions by key developed countries. It built a strong coalition of support with countries of Africa, Latin America and Asia. India also stood up for the cause of the Least Developed Countries (LDC).
On the trade facilitation agreement, it is felt that it will improve competitiveness of Indian industry both in domestic trade and international trade.
Industry has welcomed the trade deal reached at the Bali Ministerial Conference of the WTO. FICCI President Naina Lal Kidwai said, “We congratulate our minister for successfully protecting India's and developing countries' legitimate concerns on food security while enabling the trade facilitation advantages to come through”.