The ninth WTO ministerial conference (MC9) that starts tomorrow is going to be closely watched across the globe not only because it will discuss issues of critical importance for all its 159 members, but also because the fate of multilateral trading regime is at stake after 12 years of painstaking negotiations.
The Doha round of global talks started in 2001. Since then member countries have not been able to conclude a single agreement on any topic even as the developed and developing countries continue to spar over issues concerning agriculture and market access.
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"India's engagement with WTO had been positive and sincere. We will see that the outcome is also positive for all countries," said commerce and industry minister Anand Sharma as he left for Bali. The Cabinet Committee on WTO-related matters also met last week under the chairmanship of Prime Minister Manmohan Singh that finalised the government's negotiating mandate.
For India, success of the talks in Bali assumes significance as it scrambles to offer subsidies for its poor farmers across the country. While according to WTO rules these subsidies are regarded as ‘trade distorting’, for developing countries like India it has direct relation to the livelihood of its around 600 million farmers.
India recently rolled out the National Food Security Act, 2013 under which the government provides rice, wheat and millet at a subsidised rate. Some member countries have already started pointing fingers at this programme, referring it to be distorting trade.
“Any outcome sans a good development package, including adequate safeguards for developing countries to run their food security programme, will erode the credibility of the WTO with regard to its development objective under the Doha Round,” said Chandrajit Banerjee, director general, Confederation of Indian Industry (CII).
The WTO has proposed a four-year interim measure within which time, developing countries like India can offer those food subsidies that are at present considered illegal under the global trading norms.
This is because developing countries are allowed to offer food subsidies to the limit of 10% of the total agriculture produce. This is also referred as the ‘di minis’ level under trade parlance. The limit for developed countries is 5%.
India is also going to negotiate the proposed agreement on trade facilitation that aims to simplify customs rules across all international borders for faster movement of goods. Under this agreement, India mainly has concerns on courier services.
“If Bali fails to deliver, then it will weaken the multilateralism and the credibility of WTO as an institution. Failure in Bali would be very disappointing particularly in view of the mega-FTAs currently under talks, that will imply a huge share of world trade conducted on preferential basis which may not be to the advantage of India,” said FICCI President Naina Lal Kidwai.
This is for the first time that the government is facing a WTO ministerial with general elections just a few months away. Hence, the outcome in Bali will have impact on the ruling coalition's fate in its domestic constituency as well.
The Bali talks have already come under scathing attack from global civil societies and NGOs that have warned against any trade-offs with the lives of farmers. Over 150 civil society groups consisting of farmers, trade unionists and consumer activists are expected to participate in the talks and stage protest across Bali.
The talks will continue till December 7 at the Bali Nusa Dua Convention Centre.