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Last updated: 27 Sep, 2014  

WTO.9.Thmb.jpg WTO deal: North-South divide rears its head again

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Bikky Khosla | 05 Aug, 2014
The WTO talks have failed. Last year, all the 159 WTO members reached a historic Trade Facilitation Agreement, signaling an erosion of the traditional North-South divide and raising hopes that the deal would inject a whooping $1 trillion into international trade and create some 21 million jobs -- nearly 18 million in developing nations -- by lowering transaction costs and red tape. But the deadline for signing part of the accord expired on July 31, with India refusing to compromise on its demand for a permanent solution to the issue of food stocks and subsidies.

When the deal was signed in December 2013, India agreed on the terms only when it was extended protection for its subsidy programme under a 'peace clause'. Since then, it has been widely expected by the Indian side that the clause would be extended indefinitely. I don't think there is anything wrong in having such expectations -- we still have more than 363 million people living below the poverty line. However, now some developed countries are opposing India's demand for the assurances that no action would be taken against its stockpiling and subsidies till there is a final solution to the food security issue.

There are some other important points which should not be ignored: First, India's support to farmers through Minimum Support Price (MSP) Scheme amounts to around $1.2 billion, well below that of some developed countries such as the US and the EU. According to a report, in 2012 the US and the EU gave about $30 billion and $107 billion worth of subsidies to farmers, respectively. Second, compared to most of the developed countries, India is a small exporter with not enough muscle to distort the global market prices. Third, the 10% cap calculated based on 1986-88 prices in no way seems fair.

A senior US official has reacted that America "regrets that a handful of members have decided not to adhere to their commitment". Even talks are in the air that WTO may move ahead without India. I don't think such views hold much weight. There is no doubt that the Bali package has potential enough to push global trade in a big way, but that should not be at the cost of the millions of poor living in India or in any developing or least developed countries. India's stand is absolutely correct -- the North should  try to understand the challenges of poverty faced by the South. I hope, differences would be resolved at the next WTO meet scheduled next month.

I invite your opinions.
 
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India needs to stand firm
Pankaj | Thu Aug 7 03:35:52 2014
Well written article by Bikky Khosla. The moot point is that India should not compromise on the domestic food security needs of the poor Indians, in the process of giving impetus to global trade through WTO. As mentioned in the article, subsidies to farmers in India is a fraction of the subsidies given to farmers in US and EU. But these countries will not acknowledge this fact, instead try to push the developing countries. India being a small exporter can't anyway influence global market prices. And imagine 1986-88 prices are being used to calculate the cap ! This situation reminds me of the pressure that was being created by developed countries in reducing carbon foot print, when all the carbon emissions and ozone depletion has been caused by the developed world over the last 70-80 years in their process of industrialization. Now when developing countries like India need industrialization, they are being asked to reduce carbon emissions !! India needs to stand firm.


India's stand is correct
ASPY BHARUCHA | Wed Aug 6 13:53:40 2014
Indeed a good write up by Bikky Khosla. It has been since long that developed countries like US and European Zone have been dictating their own terms which suits them most and ignoring underdeveloped and developing countries grossly. India's stand is correct and this Government should not bow down their [US / EUROPEAN] demands which are indeed unjust and uncalled for. Kudos to our Indian officials who have taken right though the steps being accounted by US/EURO harsh.


Modiji's stand on TFA must be hailed
Janrdhan | Wed Aug 6 12:55:29 2014
US say that it is giving farm subsidy in the farm of insurance and the like to the tune of 20 Billion to farmers. But total farm bill that gets okayed soon in their senate is about 990 Billion dollars for coming 10 years ! That means the US Government pumps in abut 99 Billion dollars per annum into farming in their own country. It is total deception by the US and also by the EU. Now, Let us look at the farm subsidies of EU for the last few decades. It stood at 40 billion Euros all along despite cut in export subsidies from 10 billion Euros in 1990 to Zero Euros in 2010. However, Presently EU pays to its farmers the same 40 Billion euros which It had paid in 1990 in the name of Decoupled payments of 30 Billion and other payments of 10 Billion. Only names of the payments change. But subsidy payments will not stop.So India has reason to oppose TFA of the WTO. So Modiji’s stand on TFA of WTO must be hailed.


WTO deal
M.N.Rai | Wed Aug 6 12:08:53 2014
America is pauper now but feels emboldened by destroying NAM and RED block.Its regret story seems to have on rally.This country is poking its nose in the affairs of every other country and getting its cutnose back.If India wants to subsidize and guarantee food to its over 100 crores poor natives,why this bloody criminal country is feeling stomach pain.The world of poor and miserable must pray against this flesh trader.Today under pressure from these corrupt nation like US and EU,Indian labour is being denied the rights bestowed on them by the constitution.US must not forget the turmoils of two world wars which was by and large the outcome of labour unrest.We Indians could only hope that good sense prevails and these KAFAN CHORS are sidelined from the world mainstream.


WTO & India
Roy44Ham | Wed Aug 6 11:22:42 2014
India must stand their ground and most of all reject all GMO grown crops, you have already experienced the disasters caused by these organisms and pollution as well as the human damage. Build on a well educated manufacturing base, encourage entrepreneurs and encourage natural sustainable farming. You will be bullied by the USA due to the massive corruption caused by Monsanto et. el. Most of all get your own corruption under control with a very strong whistle blower program that ensures NO retaliation what so ever for a whistle blower.This single act showing honesty and integrity will go a long way in building India into the country it was meant to be.


Compare population
Dharanidharan | Wed Aug 6 11:22:16 2014
India decision is correct we must appreciate our PM for his decision to save the people. For how much population in US they gave $30 billion and for how much population EU they gave $107 billion compare to India population on this ratio how much India have to gave Work out on population ratio What is the percentage it works out for the population and subsidies in US and EU Now you also take out the average income in US and EU per person and WORK out the percentage of subsidies and calculate the average income in India and calculate the percentage when a higher income in US and EU get subsidies lower income India naturally has to spend more on subsidies They must not talk about subsidies it is internal matter of the nation and people livelihood It is only benefit the farmer


WTO Deal: India is on lower side
Pradeep Singh | Wed Aug 6 04:31:42 2014
This issue only rise once in year. India even not able to get support of any big country. Why? I feel there is rift in strategic need of nation. Why India can't put pressure on other countries. One side we talk about superpower and at the same time even we are not able to get support of other poor developing countries. India have to interviewing diplomatically. Why don't India's PM talk to US & UK counterpart.

  Re: WTO Deal: India is on lower side
M.N.Rai | Wed Aug 6 12:18:22 2014
USSR was a superpower but now stands miserable.US is constantly facing bankruptcy.North Korea is eyeing them revengefully. Original Americans are now second class citizens.US represents only traders and Drug mafias.Its leaders trade worldwide and rob small nations by bullying them.UK is on the verge of total bankruptcy.It is unable to carry its own corpse.Indira Gandhi never talked.History has it that she dictated them and always challenged their might..If the Indian PM has to carry the nations pride ahead,he better goes for re-organizing NAM.


 
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