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India’s curbs on import of pulses: US, Australia, EU raise concerns at WTO

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: World Trade Organization (WTO), quantitative restrictions

Mains level: India’s status as importer/exporter and effects of its decisions on domestic as well as global economy


News

Opposing India’s move to curb imports

  1. Members of the World Trade Organization (WTO) including the US, Canada, Australia, European Union and Japan have raised concern over India’s quantitative restrictions on the import of pulses
  2. India capped imports of green gram (moong), black matpe (urad) and pigeon peas (arhar) in August in the wake of domestic harvest and concerns over the slump in prices of traditional pulses
  3. India’s decisions in November to raise import duties on pulses by up to 50% and put stringent fumigation requirements have also irked pulse exporting countries

Allegations on India

  1. Quantitative restrictions by India on the import of pulses distort global prices and put the future of farmers across many countries in peril
  2. This is because India has been the largest producer, as well as traditionally the largest importer of pulses to ensure a steady supply of the protein-rich diet to its citizens

WTO provisions

  1. WTO mandates elimination of quantitative restrictions covering all import- and export-related measures
  2. Exceptions are allowed under specific circumstances such as to:
  • safeguard the balance of payments
  • to protect an industry at an early stage of development or
  • to prevent sudden increases in imports

Members reaffirm support to WTO at informal ministerial

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, Buenos Aires ministerial, Doha Development Agenda (DDA)

Mains level: Rising protectionism across world and threats for India


News

Informal ministerial of the World Trade Organization

  1. An informal ministerial of the World Trade Organization (WTO) is being organized by India
  2. The move comes barely three months after the Buenos Aires ministerial collapsed over issues such as the role of the WTO as a multilateral trading body
  3. The informal ministerial unanimously reaffirmed commitment to preserving a rule-based, multilateral trading system that the WTO represents

Why this move?

  1. The US recently slapped a tariff on its imports of steel and aluminum and hinted at more such protectionist steps
  2. It has also dragged India to the WTO over the latter’s export subsidy programmes, alleging these are hurting US companies
  3. Growing unilateral protectionist policies by the US and some other countries have worsened fears of an escalating global trade war

India’s stance on various issues at the WTO

  1. India called for respecting mandates and decisions made at earlier ministerial, including the Doha Development Agenda (DDA)
  2. It pushed for preserving the mandate of special and differential treatment to poor and developing nations
  3. Special treatment allows longer time frames to such nations than their developed counterparts to implement a particular trade agenda, among other facilities
  4. India has been calling for the need for developed nations to cut their massive trade-distorting farm subsidies

Back2Basics

Doha Development Agenda (DDA)

  1. The Doha Development Round or Doha Development Agenda (DDA) is the latest trade-negotiation round of the World Trade Organization (WTO) which commenced in November 2001
  2. Its objective was to lower trade barriers around the world and thus facilitate increased global trade
  3. The most significant differences are between developed nations led by the European Union (EU), the United States (US), Canada, and Japan and the major developing countries led and represented mainly by India, Brazil, China, and South Africa
  4. Doha Round talks are overseen by the Trade Negotiations Committee (TNC), whose chair is the WTO’s director-general

U.S. challenges India’s export subsidies at WTO

Note4students

Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Targeted Schemes

Mains level: Reason behind this challenge against Indian Subsidies.


News

US challenges India’s export subsidies

  1. The US has challenged India’s export subsidy programmes at the WTO
  2. The US had requested dispute settlement consultations with the Government of India at WTO on the issue
  3. It is different: Unlike the many trade disputes between India and America that are sector specific or product specific,
  4. the new move is broad and sweeping in targeting the whole range of Indian export subsidy programmes

Targeted Schemes

  1. A statement from the (United States Trade Representative)USTR has listed
    (1) the Merchandise Exports from India Scheme;
    (2) Export Oriented Units Scheme and sector specific schemes, including Electronics Hardware Technology Parks Scheme;
    (3) Special Economic Zones;
    (4) Export Promotion Capital Goods Scheme, and a duty free imports for exporters programme
    as distorting trade in a way that allows Indian exporters “to sell their goods more cheaply to the detriment of American workers and manufacturers”

Argument against India

  1. According to the US, the above export subsidy programmes harm American workers by creating an uneven playing field on which they must compete

Why India opposed deal to end fisheries subsidies at WTO

Image source

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, Exclusive Economic Zone

Mains level: Pending issue of subsidies and WTO and its effects on India


News

Collapse of WTO talks on fisheries subsidies

  1. India’s opposition to a proposed agreement to end fisheries subsidies at the World Trade Organization (WTO) meeting in Buenos Aires led to a collapse of the negotiations
  2. It may be linked to a potential adverse political fallout in India’s coastal states

Decision at the WTO’s 11th ministerial conference (MC11)

  1. The 164 member countries of the multilateral trade body could only finalize a work programme on fisheries subsidies to finalize a deal by 2019
  2. India opposed any interim deal to restrict illegal, unreported and unregulated (IUU) fishing
  3. India did not agree to an interim outcome as many elements concerning interests of developing countries were not defined clearly

What did India want?

  1. Since countries have territorial sovereignty till EEZ (Exclusive Economic Zone), according to international rules, India insisted to protect its fishing rights till that point
  2. Initially, India had proposed special and differential treatment for its artisanal fishermen that would have allowed it to continue to supply fuel subsidy within the territorial waters, which is within 12 nautical miles from the coast
  3. It subsequently changed its stand, demanding a carve-out for all of its fishermen allowing them to fish till the EEZ, which is 200 nautical miles from the coast

Why the opposition to fisheries subsidies?

  1. Developed countries claim that fisheries subsidies, estimated to be in tens of billions of dollars annually, create significant distortions in global fish markets
  2. These are a major factor contributing to overfishing and overcapacity and the depletion of fishes
  3. A deal is mostly targeted at China, which is the largest catcher and exporter of fish and provides huge domestic subsidy to its fishermen

Counter-argument by developing countries

  1. Developing countries such as India want to protect subsidies for low-income, resource-poor fishermen for whom it is a matter of livelihood
  2. India is a distant seventh among top fish exporters and does not indulge in IUU fishing

[op-ed snap] The decline of the WTO

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO ministerial meet, European Union, Trade Facilitation Agreement, Doha Development Agenda, BRICS, Dispute resolution mechanism, Trans-Pacific Partnership, North Atlantic Free Trade Agreement, Silk Route

Mains level: Decline of western hegemony in global trade and prospects for India


Context

  1. Trade ministers from around the world attended the once-in-two-years World Trade Organization (WTO) ministerial in Argentina earlier this month
  2. They deliberated on several crucial issues that will impact the multilateral system of global trade

Changes since last ministerial

  1. Britain is entirely free of the European Union (EU) agenda and has a huge interest in building a robust multilateral trading system
  2. The US has stated repeatedly that the WTO multilateral system does not put US interests paramount and is not something that will have its support

Previous rounds of ministerial meetings

  1. These have resulted in very little progress
  2. Trade Facilitation Agreement passed at the Bali ministerial in 2013 was on the cards since the Doha Development Agenda in 2001 ministerial
  3. The 2015 ministerial in Nairobi did nothing much to enhance the WTO’s stature

Reasons behind  limited progress in past two decades

  1. One-sided nature of the original agreements
  2. The North-South divide
  3. The aggression of the BRICS (Brazil, Russia, India, China and South Africa) lobby on subsidies, agriculture, and food security

The dispute resolution mechanism

  1. It has been in place since the WTO’s inception in 1995 and has served its purpose well
  2. It has been widely hailed as the biggest success of the WTO
  3. The WTO dispute settlement mechanism involves consultations, panel proceedings, appellate body proceedings, and implementation and enforcement
  4. The panel report, or, in the case of an appeal, the appellate body report and the panel report, is adopted by the DSB
  5. After the adoption of the reports, the respondent, if found to be in breach of WTO law, has to implement the recommendations and rulings adopted by the DSB, which comprises all WTO members

USA a reluctant participant

  1. The US has always been a reluctant participant in the WTO dispute resolution process
  2. Its record also reflects patchy compliance with WTO decisions by the US
  3. Now, in what could prove to be a body blow to the entire system, the US has refused to participate in the appointment of new judges to the appellate body
  4. Members are usually appointed by consensus, and the US is a major participant
  5. This new approach of systematically diminishing the appellate body will put an end to the DSB

‘America First’ harmful to global trade

  1. Scrapping the Trans-Pacific Partnership agreement, undermining the North Atlantic Free Trade Agreement and now slowly dismantling the working parts of the WTO system, will have long-term effects on global trade

Way forward

  1. Dreamers speak of the original Silk Route that ran from Japan to the Mediterranean Sea and history may repeat itself
  2. Global trade is no longer going to have the leadership from the Western world that it did
  3. The pendulum of global trade is swinging from the richest nations to the most populous ones
  4. China, India, Brazil, and Russia should fill this void

Food security: time to move to cash transfers

 

source: 

Note4students:

Mains paper 3:Indian Economy|Issues related to direct and indirect farm subsidies and minimum support prices

From UPSC perspective, the following things are important:

Prelims level: Bali conference, Peace clause

Mains level: PDS transfer vs Cash subsidy (the never ending debate!)

News:

The impasse at the recently concluded 11th ministerial conference of the World Trade Organization (WTO) in Buenos Aires is casting doubts over the future of developing countries’ food procurement programmes

What is a bone of contention?

  1. US allegedly reneged on its promise to not block food stockholding policies in return for India, the country with the world’s biggest stockholding programme, signing the trade and facilitation agreement (TFA).
  2. US support is important because India’s Food Security Act, passed in 2013, ran into WTO rules that keep a country’s domestic policies from distorting international trade.
  3. The law forced a significant ramping up of food procurement by the government to provide coverage to two-thirds of its population. Simultaneously, the government supports farmers through minimum support prices.
  4. The cost of these programmes—basically a country’s food subsidy bill—says the WTO, must not exceed 10% of the value of production based on the reference price of 1986-88.
  5. At the Bali conference in December 2013, India secured a ‘peace clause’ that protected it from legal action should it breach the 10% limit.
  6. However, the concession was limited to programmes running in 2013 and it comes with onerous reporting requirements about food subsidy levels.

Why is India complaining?

  1. Given that food subsidy is calculated at 1986-88 prices, many countries are limited to less than 10% of production in practice on account of inflation.
  2. Due to the obligation to reduce trade-distorting subsidies, rich countries have redesigned their programmes to give unconditional cash transfers to farmers—a policy that does distort trade by lowering international prices.

 

Cash transfer as a model for delivering food subsidy in India

(a) Rationale

  1. India’s current food and farmer support programme is distortionary, leaky and unsustainable.
  2. If the currency appreciates or either one of MSP or procurement increases, India could breach its 10% limit and face hostile litigation by other countries for violating WTO rules.
  3. It is, perhaps, wise to keep our food-support schemes under WTO-prescribed limits and gradually transition to a cash-based transfer for both consumers and farmers.
  4. That way, we will preserve our political capital for other issues like trade rules on electronic commerce, services trade, fisheries and the TFA.
  5. India can utilize this situation to make a virtue out of a necessity. Government policies have increased bank account coverage to 99% of households, and more than 90% of adults are linked to the UID scheme, Aadhaar.
  6. A move to cash transfers, for both consumers and producers, is more practical today than it was four years ago.
  7. Cash transfer provides beneficiaries flexibility as well as convenience and choice in terms of quality of food;
  8. Cash transfer allows them to buy better quality grains than what they got through the PDS or could diversify their diet by adding dairy products or local grains                                                                                                                                                                                                                                                                                                       (b) Challenges
  1. cash-transfer pilot in three Union territories, conducted from January 2016, showed that 20% of the beneficiaries reported not receiving the transfer, even though the government reported 99% success.
  2. Beneficiaries spent more time and money in obtaining the cash and food from the market. Also, grievance redressal mechanisms are inadequate.

Way Forward

  1. The op-ed therefore, favours a choice-based transition to cash transfers so that people continue to have the option to remain in the present system until they’re comfortable with the quality of implementation in their region.
  2. This could continue for a couple of years after the capability of starting universal cash transfers is achieved.

 

119 nations back move to remove barriers limiting women’s participation in trade

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: Buenos Aires Declaration on Women and Trade, WTO

Mains level: Efforts across world for Women empowerment


News

Buenos Aires Declaration on Women and Trade

  1. Nearly three-fourths of the 164-member World Trade Organisation (WTO) have supported a declaration seeking women’s economic empowerment by expeditiously removing barriers to trade
  2. India stayed away from declaration, opposing the linking of gender and trade and said that such issues should be discussed outside WTO

What will declaration do?

  1. WTO members and observers supporting the Declaration have specifically agreed to explore and find ways to best tackle women’s general lack of access to trade financing and sub-optimal participation of women in public procurement markets
  2. Inclusion of women-led businesses, in particular, small firms in value chains has also been identified as a theme related to trade and the economic empowerment of women

Reasoning behind India’s stand

  1. Agreeing to the proposition to link gender and trade could lead to advanced countries using their high standards in gender-related policies to curb exports from the developing world
  2. This could also indirectly restrict developing countries from incentivizing their women citizens as part of measures to address developmental challenges
  3. Discussing such issues at WTO will set a precedent to bring in other non-trade issues such as labour and environment standards into the WTO’s ambit

No WTO deal without food security: India

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, WTO Ministerial Conference, Doha Round of negotiations, Trade Facilitation in Services (TFS) Agreement

Mains level: Issues related to food security and WTO agreements


News

Issue of public stockholding crucial

  1. India has said it cannot envisage any negotiated outcome, at the ongoing meeting of the World Trade Organisation’s apex decision-making body, which does not include successful resolution of the food security right issue
  2. At the Plenary Session of the WTO Ministerial Conference (MC), India’s commerce and industry minister said the permanent solution for public stockholding for food security purposes is a matter of survival for 800 million hungry and undernourished people in the world

What does India want?

  1. India wants the WTO membership to re-endorse the centrality of development (the agenda to improve the trading prospects of developing nations) in WTO negotiations without creating new sub-categories of countries
  2. This is in the context of attempts by certain rich countries to wreck the broad unity among developing nations on a host of issues
  3. Developed countries such as U.S. have suggested that countries such as India and China are currently emerging economies and reasonably strong in trade — unlike others in the developing world
  4. Therefore, such powerful nations that are still in the ‘developing’ category do not deserve to gain from the favorable treatment meant only for developing nations in WTO Agreements

‘No’ to ‘new issues’

  1. India opposed the endeavor of certain countries to include ‘new issues’ — such as e-commerce, investment facilitation and matters relating to small firms — in the ongoing Doha Round of negotiations
  2. The Minister also pushed India’s proposal for a Trade Facilitation in Services (TFS) Agreement, which, among other things, aims to liberalize rules on movement of professionals and skilled workers across borders for temporary work/projects

[op-ed snap] Crunch time at WTO

Image Source

Note4students

Mains Paper 2: IR | Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

From UPSC perspective, the following things are important:

Prelims level: Issues related to the WTO(read the attached story)

Mains level: Upcoming challenges in the WTO’s meeting


News

The proposals trade ministers will consider WTO’s 11th biennial Ministerial Conference(in Buenos)

  1. Notable among the proposals trade ministers will consider are those relating to new rules on farm subsidies, the elimination of support for unsustainable fisheries, and the regulation of e-commerce
    Joint Proposals by India and China
  2. With the backing of more than 100 countries, a joint proposal from India and China to eliminate the most trade-distorting farm subsidies worth $160 billion in several industrialised economies
  3. It is arguably the most contentious agenda item at the Ministerial
  4. The two countries see this as a prerequisite to address the prevailing imbalance in the Agreement on Agriculture, which unfairly benefits developed countries

Cautions regarding the joint proposals 

  1. But host Argentina has cautioned that the joint proposal could potentially unravel negotiations

Dispute regarding subsidies and G-33 coalition

  1. The other major dispute centres on finding a so-called permanent solution to the large subsidies that underpin public stock-holding programmes to bolster food security in the developing world
  2. The G-33 coalition, which includes Indonesia, China and India, seeks a complete exemption from commitments to reduce subsidies, such as minimum support prices, from this poverty-alleviation programme
    Support from EU and Brazil
  3. The EU and Brazil have expressed broad support for the G-33 coalition’s position on public stock-holding programmes
  4. But in return they seek agreement on their own proposal to reduce trade-distorting subsidies on a percentage basis, in both advanced and developing economies

A new issue created by the US

  1. The US has been exploring an alternative, unilateral route away from the formal dispute resolution mechanism of the Geneva-based body to settle perceived and real trade conflicts with partners
  2. It has blocked fresh appointments to fill vacancies on the seven-member WTO appellate body
  3. The risk of Mr. Trump’s protectionist rhetoric translating into economic barriers remains real
  4. Trade leaders gathered in Buenos Aires can ill-afford to lose sight of this imperative

WTO: diverse views fuel bleak prospect for outcomes

Note4students

Mains Paper 2: IR | Important International institutions, agencies & fora, their structure, mandate

From UPSC perspective, the following things are important:

Prelims level: WTO, Doha Round negotiations, Special Safeguard Mechanism, Aggregate Measurement of Support (AMS), G-33, South Centre

Mains level: WTO mandate and its effect on India’s interests


News

World Trade Organisation’s (WTO) Buenos Aires meeting commenced

  1. Amid concerns on support for anti-globalisation, protectionism and bilateralism, World Trade Organisation’s (WTO) Buenos Aires meeting commenced on 10th December
  2. A vast majority of the 164 WTO member nations — led by India, China and South Africa — are learnt to be demanding that the final declaration of the WTO’s highest decision-making body reaffirms commitment to multilateralism and rules-based trading system

No substantial outcome expected

  1. This might be due to the divergent views of the WTO members on several issues, including the outstanding ones in the ongoing Doha Round negotiations
  2. Countries, mostly from the developed world, want what they call the ‘21st century trade issues’ — such as e-commerce, investment facilitation, matters relating to small firms and gender equality — to be discussed for rule-making to enhance the relevance of the WTO
  3. India, and several countries mainly from the developing world, are against introduction of such ‘new issues’ into the Doha Round

A separate work programme

  1. Owing to persistent differences, it is likely to be decided that issues such as ‘Special Safeguard Mechanism’, ‘limiting harmful fisheries subsidies’, ‘possible negotiations on e-commerce’, as well as ‘services trade facilitation’ will be addressed through separate ‘work programme(s)’ post Buenos Aires
  2. India, China and South Africa have the support of around 120 WTO member nations on the issue of continuation of the ‘development’ mandate of the Doha Round without any dilution
  3. This support also applies to India’s joint proposal with China — asking the developed nations to eliminate the most trade-distorting form of farm subsidies, known in WTO jargon as Aggregate Measurement of Support (AMS)

India’s stand

  1. On agricultural issues including the ‘permanent solution’ and SSM, India is working with G-33 (a group of 47 nations)
  2. India had made it clear that it would not accept a ‘permanent solution’ with onerous conditions that in turn make it tough for the Indian government or other developing countries as well to meet the food security needs of their people
  3. To get wide support on India’s interests, commerce minister also met with the South Centre, an intergovernmental organisation of developing nations

Back2Basics

Know all about WTO here

India opposes e-commerce talks at WTO; submits document

Note4students

Mains Paper 2 : Global groupings and agreements involving India and/or affecting India’s interests
Prelims level: Not much
Mains level: India’s stand on e-commerce in WTO

News

  1. India has for the first time submitted a formal document opposing any negotiations on e-commerce at the World Trade Organisation (WTO).
  2. The submission comes ahead of the key ministerial conference of the WTO next week.

India’s Stand

  1. The country has said that it would “continue the work under the Work Programme on electronic commerce… based on the existing mandate and guidelines.
  2. India has maintained that e-commerce per se may be good for development
  3. But it may not be prudent to begin talks since many countries don’t fully understand the implications of negotiating binding rules.
  4. India also asked the General Council for periodic reviews based on reports made by agencies responsible for implementation of the work programme.
Work Programme on Electronic Commerce
  1. E-commerce entered the WTO in 1998, when member countries agreed not to impose customs duties on electronic transmissions.
  2. the moratorium has been extended periodically.
Stand of Other Countries
  1. The United States last year floated a proposal on e-commerce
  •   prohibiting digital customs duties,
  •   enabling cross-border data flows,
  • promoting a free and open internet and
  •  preventing localisation barriers
  1. China wants easier norms for goods ordered over the internet but physically delivered.
  2. Some countries want to convert this temporary moratorium on customs duty on electronic transmissions into a permanent one.
Adverse effect of Permanent Moratorium
  1. Considerable leakage of revenue as more products and services get delivered through electronic transmissions.
  2. Manufacturing through 3-D printing in absence of customs duty could have severe adverse impact on the domestic manufacturing sector.

Tread carefully on fishery subsidies in WTO: CWS to government 

Note4Students

Mains Paper3: Issues related to direct and indirect farm subsidies and minimum support prices.
The following things are important from UPSC perspective:

Prelims Level: WTO, EEZ, Uruguay Round

Mains level: The news card discusses the working paper by CWS which cautions India to be vigilant while taking obligations on the subsidies it gives
to its fisheries sector.

News

Context

  • Ahead of the key ministerial meeting of the World Trade Organisation (WTO), a government think tank has cautioned India to be vigilant while taking any obligations on the subsidies it gives to its fisheries sector as it may end up curtailing the country flexibility to fish in its own waters.
  • Citing fish and two of its byproducts – fish oil and fish meal – as having high global demand for use in pharmaceuticals and anti-biotics, respectively, New Delhi-based Centre for WTO Studies (CWS) in a working paper has said that the disciplines on fishery subsidies have a market access agenda and a clear commercial interest of selected developed countries.

Background

  • The paper comes at a time when India and some other developing countries are fighting to give fuel subsidies to their small and resource-poor fish workers in the proposed global agreement to prohibit subsidies to vessels engaged in illegal, unreported and unregulated (IUU) fishing in its exclusive economic zone (EEZ).
  • EEZ is the sea zone extending up to 200 nautical miles from the shore and governed by the central government.

Key Highlights from CWS Working Paper

  1. An agreement on fisheries without exempting developing countries will restrict their flexibility to trade in fish and its byproducts.
  2. As per the paper, the global fish meal and fish oil market is projected to reach $14.28 billion by 2022.
  3. Also, the binding rules on fisheries management have been enunciated under the United Nations Convention on the Law of the Sea andthe UN Fish Stocks Agreement.
  4.  Besides, non-binding obligations on fisheries management are entailed under the Food and Agriculture Organization.
  5. The countries need to be vigilant as IUU measures should not be a disguised restriction to international trade.

Concerns regarding Agreement on Fishery Subsidies

  1. An agreement on fishery subsidies will ensure that there is no competition from developing countries.
  2.  Developing countries wouldn't be able to exploit their own resources because they won't have the capacity to do so.
  3.  Therefore, developing countries need to ensure that the history of the imbalance suffered from the disciplines on agriculture subsidies during the Uruguay round is not repeated in fisheries subsidies.

WTO: India sounds warning over food security clause

Note4Students

Mains Paper3: Issues related to direct and indirect farm subsidies and minimum support prices.

The following things are important from UPSC perspective:

Prelims: G33, Peace Clause, WTO

Mains level: Peace Clause has been in the news since Bali ministerial conference, 2013 and is an important topic for the Mains.


News

Context

  • India’s WTO ambassador J.S. Deepak warned of a “spectacular failure” at the forthcoming Buenos Aires trade ministers’ conference if countries fail to deliver a credible “permanent solution” on public stockholding (PSH) programmes.

India’s demands regarding Permanent Solution on PSH

  1. Trade ministers had mandated WTO to conclude the permanent solution for PSH programmes by the 11th ministerial meeting that begins on 10 December.
  2. The permanent solution has to be “an improvement” over the existing perpetual peace clause that was concluded at the World Trade Organization’s (WTO’s) ninth ministerial conference in December 2013 in Bali, which was further clarified by the WTO General Council in November 2014.
  3. India, which is a member of the G33 coalition of more than 45 countries including China, remains concerned about “the excessively stringent transparency requirements and safeguard being proposed” by some opponents.
  4. India said the permanent solution has to provide legal permanence through amendment of WTO rules.
  5. Also, the mandate for a permanent solution on PSH flows from ministerial decisions and has no link whatsoever with the negotiations on domestic support.

Joint Proposal by Norway and Singapore

  1. India is prepared to consider reasonable transparency provisions that are implementable by developing countries, it will not accept onerous conditions for safeguards as proposed in a joint proposal by Norway and Singapore.
  2. The transparency conditions includes-
  • Informing WTO about “exceeding or risk of exceeding” the agreement measurement of support or most trade-distorting farm subsidy limits;
  • Timely notification of domestic subsidies;
  • Information about breaches if any on a post-ante basis; and prompt notification of statistical information.
  1. The proposal listed two “anti-circumvention/transparency” conditions for instance India and other developing countries must ensure that “stocks procured under such (PSH) programmes do not distort trade or adversely affect the food security of other members.
  2. Further, India and other beneficiaries of the permanent solution must ensure that stocks procured for their PSH programmes do not enter “direct or indirect exports”, Norway and Singapore maintained.

Views of various countries regarding Permanent Solution on PSH

  1. Indonesia, on behalf of the G33 coalition, said, the establishment of a permanent solution on PSH for all developing members and accessible, simple and effective SSM remain priority for the Group.
  2. China said the Buenos Aires meeting must deliver a simple and effective permanent solution without onerous conditions.
  3. At the informal meeting, the opponents of an easy and effective permanent solution for PSH programmes such as the European Union, Brazil, Australia and Pakistan among others insisted that there must be strong transparency and safeguard conditions in the final instrument.
  4. Brazil said the permanent solution has to be part of an outcome on domestic support.
  5. The US is willing to support the permanent solution if it does not take the Bali decision backwards, implying that India must accept an outcome without any change/improvement from the December 2013 decision.

Various other issues raised by India

  1. India also issued several red lines for the Buenos Aires meeting, particularly on new issues such as “investment facilitation, disciplines for micro, small and medium enterprises, and gender”, saying they “do not have mandates in place in the WTO”.
  2. Also India cautioned that the ministerial meeting is being held at a particularly difficult time and context for WTO and it is not the opportune time to enter into contentious and divisive debates by seeking ambitious outcomes in e-commerce India cautioned at the meeting.

Back2basics

Peace Clause

  1. No member, can drag any developing country to Dispute settlement mechanism of WTO for violation of De-minimus limits in AoA, provided that the said developing country –
  • is paying subsidies for staple food crops for public stockholding program & food security purpose;
  • And is providing annual information of its food security Program to WTO.

 

 

 

 

Over 100 nations back India-China plan on farm subsidies before WTO meet

Image Source

Note4students

Mains Paper 3: Agriculture | Issues related to direct and indirect farm subsidies and minimum support prices

The following things are important from UPSC perspective:

Prelims: AoA

Mains level: Issues related to AoA and PSH.


News

Support to India and China in the WTO

  1.  More than 100 countries have backed a joint proposal by China and India for eliminating the most trade-distorting farm subsidies of $160 billion 
  2. This huge subsidy is given in countries like the US, the European Union, Japan, Canada, Norway, and Switzerland
  3. This proposal was given in the World Trade Organization’s 11th trade ministerial summit
  4. In their proposal, India and China said it is a prerequisite to address “the imbalance in the existing AoA (Agreement on Agriculture)
  5. In AoA only some members (the US, the EU, Japan, Canada, Switzerland, Norway and a few developing countries) have access to bound AMS(Aggregate Measurement of Support)
  6. AMS are entitlements to provide billions of dollars for most trade-distorting subsidies, which allows them much “more policy space”

India’s notice on public stock-holding (PSH)

  1. India has served notice to its the European Union, Australia, Argentina, Brazil, Paraguay and Pakistan
  2. Why: Because India will not offer any further concessions for market access or enter into trade-offs in the negotiations for a permanent solution on PSH programmes 

Back2basics

Agreement on Agriculture

  1. The Agreement on Agriculture (AoA) is an international treaty of the World Trade Organization
  2. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on January 1, 1995

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India is ‘non-committal’ on market economy tag for China II

  1. Solution: To refuse China the ‘MES’, India has taken sides with the U.S. and European Union
  2. Their stand is that in ‘market economies’ where prices of items are market determined (based on demand & supply conditions)
  3. But, there is still a significant government influence in the Chinese market
  4. The intention will be to ensure India’s manufacturing sector is not hit by unfairly priced Chinese goods
  5. Several nations that have a strong manufacturing base are concerned about according MES to China
  6. While nations in Africa and Latin America — dependant on Chinese investments to boost manufacturing — are inclined to grant MES to China

India is ‘non-committal’ on market economy tag for China I

  1. Issue: Beijing has said WTO member countries must fulfil their promise to deem China a ‘market economy’ from Dec 2016
  2. Reason: Provisions in the ‘Protocol on the accession of China to the WTO’ in 2001
  3. But India is not inclined to automatically grant the coveted ‘Market Economy Status’ (MES) to China this Dec under WTO norms
  4. Reason: Granting MES to China will severely curb the ability of nations including India to impose anti-dumping duties on “unfairly priced” Chinese imports
  5. Of the 535 cases where anti-dumping duties were imposed by India during 1994 to 2014, a maximum of 134 has been on goods from China

[op-ed snap] A case for accepting the WTO ruling

  1. Theme: Accepting the WTO solar ruling
  2. Issue: Indian govt. policy utilized Domestic Content Requirements (DCR) to favour domestic companies for purchasing solar equipment. The US contested this policy in WTO and the WTO declared the policy illegal.
  3. Dimensions of this case: legal issues, environmental impact and India-U.S. trade relations.
  4. Legal issues: WTO prohibits discrimination against goods based on origin or destination. India tried to justify policy on 3 exceptions.
  5. First, the rule is inapplicable to govt procurement. WTO using legal precedents said that govt is procuring electricity and not solar panels.
  6. Second, WTO denied India’s contention that domestic supply was limited. WTO said that supply must be seen from all sources, not just domestic.
  7. Third, India failed to show a domestic law or international legal norm which would justify its policy.
  8. Environmental impact: the WTO ruling is not against environment or the Jawaharlal Nehru National Solar Mission (JNNSM). WTO prevents members from using trade policies to discriminate in trade matters.
  9. India-U.S. trade relations: although both countries say that they want to bring down barriers but besides this dispute, there are 4 other disputes between the two in the WTO.
  10. Such policies raise the potential for other countries to discriminate against us similarly. DCR rules would also result in high costs for solar energy. Hence, India should comply with the ruling.

Indian agenda for Oslo meet

  1. India is preparing to take the lead in WTO-level talks to open up global services trade
  2. Aim: Especially to ensure easier movement of skilled professionals for short-term projects overseas
  3. Services TFA: In this regard, India is working on a formal proposal to be submitted soon before the WTO on a ‘Trade Facilitation Agreement (TFA) in Services’
  4. Why Services TFA? India has a strong services sector and a huge pool of skilled professionals & would be hugely benefitted from such agreement
  5. Background: India had informally pitched for a WTO-level ‘TFA in Services’ at the Organisation for Economic Co-operation and Development ministerial council meeting in Paris in June
  6. The ‘TFA in Services’ proposal, similar to the WTO’s TFA for Goods (aimed at easing customs norms & boosting global merchandise trade), was then welcomed by Azevêdo and several trade ministers

Amid growing protectionism, global trade ministers to meet in Oslo

  1. What? Trade ministers from many WTO members will gather at the Norwegian capital, Oslo, in October
  2. Why? To discuss the need for further liberalisation of global trade amid growing protectionism
  3. It will also deliberate upon the WTO’s future role in the context of ‘new challenges‘ for the global trading system and some ‘troubling’ international political developments

India reconsiders opposition to new trade issues at WTO

  1. Reason: Understanding that it can’t keep on opposing such issues for too long
  2. New trade issues: Such as global value chain (GVC) and e-commerce
  3. Background: India has so far maintained that member-countries must conclude the long-pending Doha Development Round of the WTO before taking up any new issues for negotiations

Recent India-US trade disputes – WTO

  1. Ban of poultry imports from US – India lost the case
  2. Solar panel case (Domestic Content Requirements) – India lost the case
  3. Increased visa fees by the US – consultations are going on currently

WTO welcomes TFA proposal

  1. WTO has welcomed India’s proposal for a Trade Facilitation Agreement (TFA) in Services
  2. Proposal: Easier temporary movement of skilled workers to boost global services trade
  3. The proposal was reiterated during the informal meeting of trade ministers from 25 WTO member countries on the sidelines of OECD ministerial council meeting in Paris
  4. WTO also emphasised on working on Trade Facilitation in Services including Mode 4
  5. Mode 4: It pertains to temporary movement of natural persons including skilled workers

Need for capacity building in WTO issues

  1. Issue: There are only a few Indian law firms in trade law practice
  2. Therefore, to handle India’s trade disputes with other countries, the govt has been engaging both international and Indian law firms
  3. However is would be desirable to see an increase in the number of Indian experts
  4. Then govt can rely entirely on local firms to deal with such issues
  5. Step: Commerce ministry is trying to build capacity to comprehensively track the trade restrictive measures taken by other countries, especially those that hurt India’s exports

 

Importance of non-issues at WTO and capacity building

  1. India has been advocating that certain issues, including labour and environment, must be kept out of the WTO’s purview
  2. Instead, they should be dealt with by the global bodies concerned such as the International Labour Organisation and the United Nations Framework Convention on Climate Change
  3. However, developed countries want that the WTO should address global trade’s new challenges including labour and environment

Non-trade issues at WTO, lack of legal experts worry India

  1. What? Developing nations, including India, are facing a double disadvantage at WTO’s (WTO) Dispute Settlement Body (DSB)
  2. Disadvantages: Lack of a sufficient pool of trade law experts to represent them effectively and also certain efforts to bring within ambit non-trade issues such as labour and environment
  3. Non-issues: Labour and environment issues would pose a great challenge for developing nations
  4. Why? Because very often these are conditions that add as restrictions in the freedom of trade particularly for developing countries

India-US fight over GATS Mode 4

  1. Context: US opposed India’s proposal named “Mode 4: Assessment of Barriers” at WTO
  2. What? It aimed at a comprehensive discussion on growing regulatory barriers in the movement of natural persons under Mode 4 of GATS
  3. Ground: That India is already pursuing a trade dispute on the same issue against Washington
  4. Many developing countries strongly supported India’s proposal because it is important to address this issue for their growing services sector

India takes on U.S. at WTO over visa rules

  1. News: India has filed a complaint to WTO against U.S over its measures raising fees on some applicants for temporary work visas, mostly involving tech sector
  2. India’s notification: The U.S. measures are not consistent with Washington’s commitments to accept services from other countries
  3. Context: Some Indians receive unfair treatment compared with Americans in U.S in providing similar services in sectors like computer services
  4. U.S. response: The U.S. visa program, which was recently updated on a bipartisan basis by Congress, is fully consistent with our WTO obligations
  5. Indian move is unusual at the WTO, where most disputes involve goods, tariffs and restrictions, not services

India studying impact of market economy status for China

  1. Context: There are chances of China being granted Market Economy Status under WTO norms
  2. Background: The 2001 agreement (Protocol on the accession of China to the WTO), according to which the WTO member nations could ignore selling price and production costs in China for 15 years
  3. Impact: WTO-member countries would have to consider China as a ‘market economy’ while adjudicating anti-dumping cases
  4. Challenge: India has extensively used anti-dumping provisions to offset the losses caused to the local manufacturers due to dumping
  5. It will severely limit India’s ability to resort to anti-dumping
  6. Criticism: There is a significant govt influence in China that in turn causes distortions in international trade

Cabinet approves Trade Facilitation Agreement (TFA)

  1. Context: Cabinet has approved, Proposal for Notification of Commitments under the TFA of WTO
  2. Relevance: Ratification and acceptance of the Instrument of Acceptance of Protocol of TFA to the WTO Secretariat and constitution of the National Committee on Trade Facilitation (NCTF)
  3. TFA provisions: Expediting the movement, release and clearance of goods, including goods in transit
  4. Measures for: effective cooperation between customs and appropriate authorities on trade facilitation and customs compliance issues
  5. These objectives are in consonance with India’s “Ease of Doing Business” initiative
  6. Condition: TFA shall enter into force for the notified members upon acceptance by two-third WTO Members
  7. Way ahead: A NCTF would be set up under Department of Commerce
PIB

India to pitch for TFA in services

India will pitch for a trade facilitation agreement (TFA) in services at the WTO has huge potential and it contributes significantly to the country’s economy.

  1. TFA in services means liberalised visa regime such as multiple entry visas, visa-free travel for foreign tourists and long term visas for business community.
  2. In RCEP negotiations, India wants a comprehensive agreement in goods, services and investments.
  3. India is very strong in the services area as the sector contributes over 50 per cent in the country’s economic growth.
  4. To boost services exports, the ministry is already working on some reform measures in sectors including education and legal.

India to counter ‘non-issues’ at WTO talks

In Regional Comprehensive Economic Partnership (RCEP) talks, India will state that the focus should be on expeditiously concluding discussions on the goods, services and investment chapters of pact.

  1. The government is firming up a strategy to prevent ‘attempts’ by rich nations to introduce ‘new pro-corporate issues’.
  2. Such as global value chains, digital economy, labour and climate-related trade into the WTO deliberations and negotiations on mega free trade agreements.
  3. The outstanding issues include an effective ‘Special Safeguard Mechanism’ and a permanent solution for the issue of public stockholding for food security purposes.
  4. India will state at the WTO that any country pitching for the introduction the ‘new issues’ will first have to ensure that they meet two criteria.
  • To establish the relevance of these issues in the context of trade.
  • To ensure that there is a consensus among all 162 WTO member countries in taking up such an agenda.

India seeks to lead developing nations at WTO

A “collaborative approach” with African countries would be central to India’s future strategy at the WTO.

  1. India plans to play a leadership role at the WTO negotiations to boost the trade prospects of the developing and poor nations.
  2. To forge strong alliances on the “development agenda” of the WTO’s ongoing Doha Round of talks.
  3. Government will hold a series of “strategy workshops” of stakeholders, inter-ministerial and Centre-state discussions in addition to summits with African countries.
  4. To take a deep dive on the outstanding issues [of the ongoing Doha Development Round talks of the WTO] and come up with an initial game plan.

WTO discussions deadlocked

  1. India has said that an instrument similar to SSM is already available to mostly the developed countries for over 2 decades.
  2. The draft text says that work on a SSM shall be pursued taking account of proposals by the WTO Member countries.
  3. It shall be in the broader context of agricultural market access.
  4. The text also says that the WTO’s General Council shall regularly review progress on SSM negotiations.
  5. The text mentions that the negotiations on the issue of public stockholding for food security purposes shall continue to be pursued as a priority.

India opposes rich nations’ attempts to cherry-pick farm issues

Against bid to link deal on farm export subsidies to Special Safeguard Mechanism.

  1. India has called for a balanced outcome in negotiations on agriculture including an agreement on Special Safeguard Mechanism (SSM).
  2. A simplified proposal on SSM had been submitted and asked WTO Chair on Agriculture negotiations to speedily work on this.
  3. India has already rejected claims by rich countries that there is a broad consensus for a deal during the WTO’s meet on getting rid of farm export subsidies.
  4. India had sought additional flexibility for developing countries so that they can provide such more subsidies on some products, while reducing subsidies on other products.

No bargain on protection of poor farmers’ interests: India

India has made it clear that protection of poor farmers’ interests and its food security programmes are not up for any bargain at the negotiations.

  1. India will not compromise on the need for a permanent solution, for the issue of public stockholding for food security purposes.
  2. India wants the WTO members to take up on a priority basis the issue of a Special Safeguard Mechanism (SSM).
  3. Brazil, being a leading agricultural exporter, wanted more market access for its farm items in return for supporting the SSM proposal, a demand that did not go down well with India.
  4. The developed countries, citing the slow progress in Doha Round negotiations.
  5. They want the Round to be brought to close or expand the ambit of the negotiations by including ‘new’ issues of their interest.

India rejects rich world’s attempt to create divisions

  1. India will oppose the developed world’s attempts to ask developing countries with relatively higher growth to commit to greater and faster market access.
  2. The world’s rich countries wants ‘differentiated’ treatment of developing countries.
  3. The countries with higher growth such as India and China can be categorised differently from the other developing countries.
  4. India’s WTO agenda also includes that the developed countries substantially reduce their trade distorting subsidies.

India rejects ‘artificial deadlines’ for WTO deal

Opposes rich nations’ attempts to introduce ‘new’ issues.

  1. India has said it will neither agree to ‘artificial deadlines’ to conclude the WTO’s Doha Round negotiations.
  2. Aimed at liberalising global trade, nor concur with rich nations’ attempts to expand the ambit of the talks by introducing “new” issues without completely fulfilling the Round’s ‘development’ dimension.
  3. The Doha Round talks had begun in 2001 and has since missed several deadlines for concluding it.
  4. Due to persisting differences between the developed and developing world on a host of issues related to trade liberalisation and granting market opening commitments.

The ‘new’ issues pertain to labour practices, environmental standards, global value chains, e-commerce, competition and investment provisions, transparency in government procurement.

India may ratify WTO trade facilitation pact

India is likely to ratify the WTO’s Trade Facilitation Agreement(TFA), aimed at easing customs rules to expedite trade flows.

  1. But, India might not not use all available flexibilities in the TFA to determine the timing of implementation of various commitments.
  2. It is part of the govt’s initiatives to attract more investment by improving India’s ranking in the World Bank’s “ease of doing business” report,
  3. The items which are still unresolved include finding a permanent solution to the issue of public stockholding for food security purposes as well as measures to protect poor farmers from sudden import surges of farm products.

At WTO talks, India to oppose bid at dilution

At Nairobi meet, New Delhi will resist efforts to create divisions among developing nations.

  1. India is likely to oppose efforts by rich countries to dilute ‘development’ dimension of the Doha Round negotiations, which are aimed at reaching an agreement to liberalise global trade.
  2. Some developed countries attempted to categorise nations such as India (now ‘developing’) as ‘emerging economies’.
  3. By making “unsubstantiated” allegations that such ‘emerging economies’ were cornering the benefits meant for developing countries.
  4. Members can apply the principle of ‘self-election’ and themselves decide if they are to be labelled as ‘developing’ countries.
  5. Significantly, there are attempts by the rich countries to “redefine developmental aspects” of the Doha Development Agenda negotiations.

WTO lowers world trade growth estimate

World Trade Organisation (WTO) revising its projections for growth in world trade downwards.


 

  1. Earlier, WTO had predicted a subdued recovery in world trade growth was estimated to improve from 2.8 per cent in 2014 to 3.3 per cent in 2015.
  2. Commerce Ministry had an ambitious target of double India’s exports in goods and services from $465 billion to $900 billion over five years.
  3. There certainly can be a case for short-term ameliorative measures.
  4. Some of the major export sectors are employment-intensive and if they suffer, this will have a bit of a domino effect.
  5. Trade policy says, need to move away from subsidies and addressing challenges relating to procedural hurdles, transaction costs and infrastructure deficits.

India wants answers on EU Ban of GVK Drugs

  1. Nirmala Sitaraman said it was improper for EU to take a unilateral step in banning the drugs from India.
  2. Our trader talks on EU-India FTA are in limbo because of this impasse.
  3. But EU has maintained that the issue stems from Hyderabad-based GVK providing them inaccurate data.
  4. India might also roll out the National Intellectual Property Rights (IPR) law. Cabinet talks going on.

WTO strikes ‘landmark’ IT trade deal


 

  1. The deal will update the 18-year-old IT Agreement and add 200 products to the zero tariff list.
  2. The deal will cut tariffs on $1.3 trillion worth of technology products besides creating jobs and adding to the global GDP.
  3. The benefitting products range from advanced computer chips to GPS devices, medical equipment, printer cartridges and video-game consoles
  4. This deal alongwith the Trade Facilitation Agreement from Doha Round will boost the global liberalized trade system.
BBC

US may force India to slash farm subsidies

US has declared special and differential treatment (S&DT) a “threshold” issue, implying that all developing countries will not be treated on a par with regard to farm and fisheries subsidy programmes.

What this means is that Washington wants China and India to be treated separate from other developing countries—regardless of their hundreds of millions of poor farmers and fishermen—with regard to commitments on farm and fisheries subsidies in the Doha Development Agenda (DDA) trade negotiations.


[op-ed snap] India’s upcoming WTO challenges

  1. India and the US are on the cusp of cementing relations on several fronts but not on the ground of trade agreements @ WTO.
  2. Washington has pointed a finger at the continued barriers, largely in 2 sectors – agriculture and intellectual property protection – in India.
  3. US raised 3 sets of concerns about Indian agriculture policies – India’s “unpredictable” tariff policies, India’s unscientific and unjustifiable import barriers on agricultural products & India’s farm subsidies.
  4. US has been on the path of projecting China and India as the untold-subsidy-villains.
  5. Will the Modi government stand up for its poor farmers? That is the test it would face at Nairobi.

India loses poultry case against United States at WTO

  1. WTO’s Dispute Settlement Board (DSB) ruled that India’s ban on import of poultry meat, eggs and live pigs from US is inconsistent with the international norms.
  2. These poultry products were banned as a precautionary measure to prevent outbreaks of Avian Influenza and bird flu fears.
  3. With this WTO ruling, US which is one of the world’s largest exporters of chicken meat will be able to export their poultry products to Indian market without any trade barriers.

India challenges WTO’s reversal on Poultry ban from US

  1. Back in 2007, India had invoked the SPS (Sanitary and Phytosanitary Measures) agreement clause of WTO and banned US poultry import.
  2. SPS is a treaty under WTO relating to food safety, animal and plant health (phytosanitation) wrt imported pests and diseases.
  3. US challenged that and won against India. India will now move to the DSB (Dispute Settlement Board) of the WTO.


:( We are working on most probable questions. Do check back this section.







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