WTO chief hopes India, US dialogue will help in ending impasse

Appreciating efforts of India and the US to end the impasse over trade facilitation and food security issues, WTO Director General Roberto Azevedo today expressed hope that talks will help end the stalemate.

"The Director General was pleased to hear that the dialogue between the US and India has resumed. He hopes that this dialogue will continue and will be fruitful in advancing efforts to resolve the current impasse, but he is not aware that any understanding has been reached as yet," WTO said in a statement.

Additional Secretary in the Commerce Ministry J S Deepak and Indian Ambassador at WTO Anjali Prasad met WTO chief Azevedo yesterday in Geneva. The WTO chief have asked all members to increase efforts to iron out issues.

"I encourage all WTO members to redouble their efforts to find a solution given the seriousness of the situation that the organization is currently in," Azevedo saidYesterday in New Delhi, Finance Minister Arun Jaitley had attributed the impasse to the unreasonable posturing by some developed countries.

"India is certainly not opposed to trade facilitation. Let me make it very clear... We are agreeing to a multilateral arrangement on trade facilitation but please keep the peace clause alive till the dispute is settled with regard to the stock holding," Jaitley had said.

He wanted the peace clause to continue till a permanent solution is found on the food stock piling issue.

Under the peace clause, a WTO member gets immunity against penalty for breaching the food subsidy cap. As per the WTO norms, a developing nation can provide food subsidy of up to 10 per cent of the total farm output.

The US earlier had blamed India for the collapse of WTO talks for the trade facilitation pact (TFA) and had said New Delhi's position had put WTO's future in uncertain ground.

India had made it clear it would not ratify TFA until a permanent solution was found on food security issue.

New Delhi had asked WTO to amend norms for calculating agriculture subsidies so that it can continue to procure foodgrains 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 would fully implement its food security programme it may breach the cap.

According to Indian officials, India's farm subsidy is well below the cap of 10 per cent. India has given a total farm subsidy of USD 56 billion, of which trade distorting subsidy amounts to only USD 13.8 billion for 23 commodities, including rice and wheat.

The food subsidy provided by India for paddy during 2010-11 worked out to be only around 6 per cent of the total output of the commodity in value terms. In case of wheat, the subsidy is negative by 1 per cent.