India & China join hands at WTO against rich nations

Doklam row fails to deter Asian giants

Even as their armies locked horns over Doklam, India and China decided to send a joint proposal to the World Trade Organization (WTO).

They jointly called for elimination of trade-distorting agricultural subsidies given by developed countries, the Union commerce ministry said on Thursday.

The India-China proposal, which was submitted on July 18 when the stand-off in Doklam was at a peak, is to counter the efforts of rich WTO member countries that are targeting the subsidies given by the developing economies to their poor farmers.

This is an important proposal by India and China in view of the ongoing negotiations for the upcoming 11th Ministerial Conference of the WTO to be held in Buenos Aires in December, the commerce ministry said.

The ministerial conference is the highest decision making body of the WTO, which meets after a gap of two years.

The India-China joint paper revealed that developed countries, including the US, the EU and Canada, have been consistently providing trade-distorting subsidies to their farmers at levels much higher than the ceiling applicable to developing countries.

"Developed countries have more than 90% of what is known in WTO parlance as Aggregate Measurement of Support (AMS) or ‘Amber Box’ entitlements amounting to nearly $160 billion" it said. 

Most of the developing countries, including India and China, do not have AMS entitlements. Therefore, India and China believe that the elimination of AMS should be t

The starting point of reforms rather than seeking reduction of subsidies by developing countries.

They said developed WTO member nations have access to huge amount of AMS beyond their "de minimis"-- the minimal amounts of domestic support that are allowed even though they distort trade. This is supposed to be up to 5% of the value of production for developed countries and 10% for developing ones.

In reality, countries like India and China have access only to "de minimis" resulting in a major asymmetry in the rules on agricultural trade.

India only provides a subsistence amount of about US $ 260 per farmer per annum compared to over 100 times more that are given away by some developed countries to their farmer.

Listing the most heavily and frequently subsidised products by the US, the EU and Canada since 1995, India and China have sought to illustrate the adverse effects of concentration of AMS on a few products, which no other proposal in the WTO addresses.