India opposes new US proposal on food stockholding at the WTO

 India and other members of the G-33 grouping have opposed a new US proposal for a permanent solution to the factious issue of food stockholding for food security in developing countries at the second informal meeting at the WTO this year.

PTI| Last Updated: Mar 22, 2015, 21:21 PM IST

Geneva: India and other members of the G-33 grouping have opposed a new US proposal for a permanent solution to the factious issue of food stockholding for food security in developing countries at the second informal meeting at the WTO this year.

India said the US proposal may result in an outcome where countries are advised as to what kind of food security programmes they should adopt, which is not part of the existing mandate.

In trying to address the food security issue vis-a- vis the proposal, one of the outcomes could be a decision on public stockholding whereas the mandate is the other way round, India argued.

The G-33 countries - led by India and including China and the Philippines - want public stockholding for food security purposes to come under the 'Green Box' ? subsidies that cause no or minimum trade distortion.

The G-33 debated the US proposal on Friday's second dedicated session this year on the issue at the Geneva-based World Trade Organisation (WTO). The proposal was among many others to clinch a deal.

The proposal comprises three main elements - reviewing efficacy and trade effects of existing food security programmes and the extent to which they meet their goals; evaluating the real and potential problems encountered in implementing food security programmes because of constraints in the existing WTO rules; and drawing from the best practices and recommendations on food stockholding.

Best practices in food stockholding would include programmes in states that are most economical, targeted and effective and the ones that are not trade distorting and have enhanced transparency.

Indonesia, speaking on behalf of the G-33 countries, said that the real issue is getting a permanent solution, not to engage in an academic programme or to expand the mandate to review existing programmes.

The informal meeting also saw the playing out of the old hardened battle lines between the proponents of another proposal to the issue, called the G-33 proposal, and the opponents of it.

The G-33 proposal suggests to amend the Agriculture Agreement to provide new flexibilities for programmes when governments buy food from low-income farmers at supported prices to build up stocks, to be shifted from the 'Amber Box' all domestic support measures considered to distort production and trade to the Green Box.

The EU along with Australia and some other countries have called for maintaining the "integrity of the Green Box" and keeping the "Green Box, Green".

One of the suggestions to the logjam was a solution on the basis of the calculation of Aggregate Measurement Support (AMS)- the base period for which is still the 1986-88 prices. India, which is against it, has been arguing that this has made it increasingly difficult for developing countries to stay within the WTO-prescribed limits.

An interim peace clause was brokered last year in November, when India had blocked the global Trade Facilitation Agreement to find a solution to the stockpiling logjam, which protected developing countries from legal consequences if it exceeded its Amber Box limits as a result of stockholding for food security.

India also suggested a new 'Friend of the Chair' (a delegate designated by the presiding officer to perform a particular task) to expedite the process of finding a solution before the end of the year as "time is running out".

Chairperson Ambassador John Adank, New Zealand's Permanent Representative to the WTO, said that "wide gaps" remain between the G-33 proposal and its opponents.

There are two broad areas of concern - the impact on the architecture of the existing Agriculture Agreement, particularly shifting the market price support programmes into the Green Box, and secondly, the "unintended consequences" of the G-33 proposal on export markets, Adanks stated.