'West must not view India's stand on TFA as market distortion'

Asserting that trade facilitation and food security are closely interlinked, President Pranab Mukherjee today asked developed nations not to view India's decision against ratifying WTO's TFA as "market distortion".

Mukherjee, who returned to New Delhi after wrapping up his two nation tour of Norway and Finland, told reporters on board his special aircraft that neither India is "isolated" nor should it be blamed for holding World Trade Organisation (WTO) hostage for its demand that food security should be made part of agreement as envisaged in the 2013 Bali meeting.

He was replying to a question whether India found itself isolated for not agreeing to initiating trade facilitation among the 160-member world body under which custom rules have to be liberalised for easy movement of goods from one country to another.

"The question is not that whether India is isolated or somebody is blaming India. The entire African countries have written letters to Director General of WTO that please treat the Bali ministerial declaration as an integrated package.

"We are definitely concerned about food security and I made it quite clear as it was made quite clear in the Bali ministerial meeting which was in continuation of the Doha development round, that if we want to maintain the developmental aspect, which was agreed by all in Doha round of discussion, food security is an important issue there," he told reporters on his while returning from his five-day visit.

India has made it clear that it would stick to its position on the food security issue at the WTO as it is the sovereign duty of the government to protect the interest of its poor and that it would not ratify Trade Facilitation Agreement (TFA) until a permanent solution was found on the food security issue.

New Delhi has asked WTO to amend the norms for calculating agriculture subsidies so that India could continue to procure food grains from farmers at minimum support price and sell them to poor at cheaper rates without violating the norms.


The current WTO norms limit the value of food subsidies at 10 per cent of the total value of food grain production. However, the quantum of subsidy is computed after taking into consideration prices that prevailed two decades ago.

There are apprehensions that once India completely implements its food security programme, it could breach the 10 per cent cap. Breach of the cap may lead to imposition of hefty penalties, if a member country drags India to the WTO.

Mukherjee emphasised that India with a 125 crore plus population needs to ensure that everyone gets food.

The production of 268 million tonnes of food grain is the core of country's security. "We shall have to produce enough, we shall have to give enough to our hungry population at the affordable cost and this can never be treated as market distortion," he said.

The President said that during his discussion with Finland Prime Minister Alexander Stubb he made it clear that the "trade facilitation and food security are closely interlinked."
He said after Bali ministerial declaration, it was clearly pointed out that entire proposal has to be taken as package and not picking and choosing.

"...from our experiences in past we have seen that when the developed world get their pound of flesh, they forget the other's concern. Therefore, Bali ministerial declaration ought to be accepted as an integrated package not by picking up and choosing specific things," he said.

India is asking for a change in the base year (1986-88) for calculating food subsidies. India wants a change taking into account the inflation and currency fluctuation, a move which is opposed by developed countries like the US, Australia and the European Union.
The WTO's highest decision making body General Council's meeting on July 31 had remained inconclusive after India stressed that Trade Facilitation Agreement (TFA) and finding a permanent solution to the food stock-holding issues should be taken up together.

Speaking on the impasse in WTO, its Director General Roberto Azevedo yesterday said there is a "widespread positive disposition" to find a permanent solution to the issue of public stock-holding of foodgrains.

"On public stock-holding, it is my sense that there is a widespread positive disposition to negotiate an outcome, or a permanent solution as it has been branded. Nonetheless, there also seems to be an overarching reluctance to put other issues on hold while that permanent solution is sought," Azevedo said at the Trade Negotiations Committee meeting in Geneva.

Stating that no solution has been found to the impasse more than two months after the deadline for the Trade Facilitation Agreement (TFA) had passed, he said: "This could be the most serious situation that this organisation has ever faced".

He added that while members should keep working for a solution to the current impasse, "we should also think about our next steps".