The WTO thing

                

            The WTO-World Trade Organization came into being starting with the establishment of GATT-General Agreement on Tariff and Trades in 1947. India is founder member of both GATT and subsequent WTO. The WTO provides a rule based transparent and predictable multilateral trading system. WTO ensures for eg India's product once imported into territory of other member country it would not be discriminated vis-a-vis the domestic product of those countries and still if does discriminates then it has dispute settlement mechanism. With Yemen joining in last ministerial conference held in December 2013, WTO now has total 160  members across the globe.  India has been opposing the Trade Facilitation Agreement of WTO, if the multilateral body does not address its concern on Food Security Programme . The Trade Facilitation Programme is aimed at reducing red-tapism and to ensure faster and easier movement of goods between WTO member countries, it will provide better market access to developed countries. However India is looking for a permanent solution to continue with its Food Security Programme  that ensures availability of food grains to almost two third of the total population of the country at subsidized prices before it can agree to Trade Facilitation Agreement (TFA) . The whole bone of contention revolves around the provision which requires member countries to limit their total agricultural subsidies within 10% of their total agriculture produce in a year . In India the total subsidies which comprises of minimum support price, the fertilizer subsidy, fuel subsidy etc sum up to cross the 10 % sought.

            WTO is currently trying to negotiate to what is known as DOHA round which began in 2001 . DOHA development round was not only to address reducing trade barriers , tariffs , non-tariffs barriers but also address the need and concern of development and economic-development. It has been thirteen years since the negotiations started and is yet to be concluded. WTO works on the principle of consensus unlike World Bank and IMF or UN where majority decides. WTO agreement typically requires everybody to agree , every member has the power of veto. Last ministerial meeting happened in Bali Indonesia, with three main issues - Agreement on Agriculture, Agreement of Trade Facilitation and special provision of Least Developed Countries , according to WTO definition, INDIA is not in the category of least developed countries. By Trade Facilitation we mean , Trade barriers, harmonizing Import Export procedures, expediting clearance , self attestation, harmonizing across all countries with greater degree of transparency.

            Developed countries already have higher degree of trade facilitation . Developing countries like India have actually have to do much more to meet such standards i.e. agree TFA. But at Bali India's concern was Food Security as it would get penalized for subsidizing agriculture beyond ten percent of the produce value , thus India wanted a exemption citing that we have large section of society living below poverty line and we be allowed to provide subsidized food to the poor and not penalized as it for the sake of the poor. We did not get the exemption , but was only awarded four year postponement sometimes called as peace clause.

            Trade facilitation has its own high benefits  . India will definitely benefit if it signs TFA, it is all about simplifying procedures. By TFA India will get access to other growing markets such as Africa, Latin America etc, it will also help in building up value chains, supply chains. India has a cost advantage thus it will benefit also it would to lead to creation of as many as 21 million jobs . There are unilateral benefits for Indian Industries as significant part of costs goes into friction and trade facilitation , multiplicity of challans, compliances , non-harmonious linkages when dealing with customs port-authorities  . The issues faced by Inc. on ground will be addressed by TFA.

            India has been stock piling of food grains even prior to Food Security bill, through the public distribution system PDS, even though we subsidize this food for the poor we provide extra incentive to farmer (by purchasing at minimum support price) and stock piling is now sixty million tonnes . India has never used its food grains reserve to flood the global market , to artificially reduce the global prices and distort market prices, thus it genuine to advocate for exemption . It is not only India but other developing and Lower developing Countries as well who get affected if 10 % subsidies limit is accepted.

            Thus, the 160 WTO members in their wisdom must consider it rather than overrule . The approach should be rather pragmatic. The recent Human  Development Report shows the stark reality of Least Developed Countries, especially south-east Asia countries. Food security is not a boogey but a genuine concern . Thus India's demand for permanent exemption is just and must be pursued by Government Of India passionately .