“Chalein saath saath, forward together we go” was the tagline of Indian Prime Minister Narendra Modi and US President Barack Obama’s joint statement in Washington, DC last week. Behind the scenes, though, the two countries remain on a collision course at the globe’s most important trade forum: the World Trade Organisation.
Modi might have enjoyed Obama’s “warm hospitality” at the White House, but New Delhi’s WTO representatives have spent the last few weeks fending off pointed questions from the Americans about India’s agricultural subsidies. On this front, the two countries do not look like they will be walking in step anytime soon.
“We had a candid discussion on Bali Ministerial of the WTO,” Modi said after bilateral meetings with Obama. Although the US president didn’t mention it in his remarks, the joint statement released by the two countries noted that they had discussed “their concerns about the current impasse at the WTO.”
Indian summer
America’s concerns have been expressed much more bluntly at the WTO’s agricultural committee.
To paraphrase some of the technical questions put to India: Why does India seem to be subsidising so many farmers? Does India realise it is the world’s largest rice exporter? What are the objectives of India’s landholding laws? Why does India think most of its farmers are low-income?
The agriculture committee is the primary forum for WTO countries to express concerns and queries regarding the agricultural portion of the Bali Package, an agreement to lower trade barriers across the globe. Earlier this year, India decided to oppose the implementation of one portion of the Bali Package, insisting that it was unfair. New Delhi’s argument was that it would not move ahead on trade facilitation, which all the countries had agreed upon, without also addressing its food security concerns.
New Delhi also complained that most of the negotiations since last year have focused on trade facilitation, with very few meetings of the agriculture committee. With the agriculture committee now meeting, however, plenty of the discussion was aimed at India’s subsidy regime, as recorded in documents put out by the WTO.
Coalition of the billing
It isn’t just America taking on India here. Pakistan, which once supported Indian efforts to lay down a food subsidy agreement at the WTO, essentially alleged that India was cheating the system.
“It seems that India is following a policy of 'double subsidisation' for producers of major crops such as rice and wheat,” Pakistan said.
Canada, Brazil and Australia also jumped on the bandwagon, with the last openly saying that India isn’t following the agreement on fair practices that had been laid down in the Bali Package.
“Australia wishes to affirm Australia's view that these export subsidy programmes are inconsistent with India's obligations and contrary to the spirit and letter of the Ministerial Declaration on export competition agreed last year in Bali,” that country said.
Defensive batting
India answered most of the queries with straightforward declarations of the current policy and what the calculations are, without seeking to explain any further. In a few cases, though, the responses did get tetchy.
Pakistan’s query about double subsidisation was barely answered, except for a statement that, “India provides support to its farmers as per their developmental requirements and in accordance with the provisions of the Agreement on Agriculture. The Agreement on Agriculture does not, as per India's understanding, bar the simultaneous provision of various forms of support.”
This earned a follow-up from both Pakistan and the US insisting that India’s status as the world’s largest rice exporter meant it ought to be more transparent. Similarly, a Canadian query for data about India’s wheat exports was brushed off with the answer that the tender process was ongoing, and details of the bid could not be revealed.
Such queries are likely aimed at putting India on the back foot, as the signatory nations head into another round of negotiations over the Bali Package. India and the US agreed to “consult urgently” with other WTO members over the current impasse. New Delhi is hoping it will be allowed to implement its massive food security programme without fear of reprisal, in return for moving ahead on trade facilitation. Considering the open hostility on display in some of the queries here, though, universal consensus – which is how the WTO is required to operate – looks hard to achieve.
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Modi might have enjoyed Obama’s “warm hospitality” at the White House, but New Delhi’s WTO representatives have spent the last few weeks fending off pointed questions from the Americans about India’s agricultural subsidies. On this front, the two countries do not look like they will be walking in step anytime soon.
“We had a candid discussion on Bali Ministerial of the WTO,” Modi said after bilateral meetings with Obama. Although the US president didn’t mention it in his remarks, the joint statement released by the two countries noted that they had discussed “their concerns about the current impasse at the WTO.”
Indian summer
America’s concerns have been expressed much more bluntly at the WTO’s agricultural committee.
To paraphrase some of the technical questions put to India: Why does India seem to be subsidising so many farmers? Does India realise it is the world’s largest rice exporter? What are the objectives of India’s landholding laws? Why does India think most of its farmers are low-income?
The agriculture committee is the primary forum for WTO countries to express concerns and queries regarding the agricultural portion of the Bali Package, an agreement to lower trade barriers across the globe. Earlier this year, India decided to oppose the implementation of one portion of the Bali Package, insisting that it was unfair. New Delhi’s argument was that it would not move ahead on trade facilitation, which all the countries had agreed upon, without also addressing its food security concerns.
New Delhi also complained that most of the negotiations since last year have focused on trade facilitation, with very few meetings of the agriculture committee. With the agriculture committee now meeting, however, plenty of the discussion was aimed at India’s subsidy regime, as recorded in documents put out by the WTO.
Coalition of the billing
It isn’t just America taking on India here. Pakistan, which once supported Indian efforts to lay down a food subsidy agreement at the WTO, essentially alleged that India was cheating the system.
“It seems that India is following a policy of 'double subsidisation' for producers of major crops such as rice and wheat,” Pakistan said.
Canada, Brazil and Australia also jumped on the bandwagon, with the last openly saying that India isn’t following the agreement on fair practices that had been laid down in the Bali Package.
“Australia wishes to affirm Australia's view that these export subsidy programmes are inconsistent with India's obligations and contrary to the spirit and letter of the Ministerial Declaration on export competition agreed last year in Bali,” that country said.
Defensive batting
India answered most of the queries with straightforward declarations of the current policy and what the calculations are, without seeking to explain any further. In a few cases, though, the responses did get tetchy.
Pakistan’s query about double subsidisation was barely answered, except for a statement that, “India provides support to its farmers as per their developmental requirements and in accordance with the provisions of the Agreement on Agriculture. The Agreement on Agriculture does not, as per India's understanding, bar the simultaneous provision of various forms of support.”
This earned a follow-up from both Pakistan and the US insisting that India’s status as the world’s largest rice exporter meant it ought to be more transparent. Similarly, a Canadian query for data about India’s wheat exports was brushed off with the answer that the tender process was ongoing, and details of the bid could not be revealed.
Such queries are likely aimed at putting India on the back foot, as the signatory nations head into another round of negotiations over the Bali Package. India and the US agreed to “consult urgently” with other WTO members over the current impasse. New Delhi is hoping it will be allowed to implement its massive food security programme without fear of reprisal, in return for moving ahead on trade facilitation. Considering the open hostility on display in some of the queries here, though, universal consensus – which is how the WTO is required to operate – looks hard to achieve.