Peace clause’ helps India, US resolve food subsidy row, WTO impasse ends

WTO impasse ends. India, US resolve food subsidy row with ‘peace clause’ that helps India. Congrats, Hon’ble Nirmala Sitharaman ji

Hindustan Times
HT Correspondent, November 13, 2014

First Published: 11:24 IST(13/11/2014)

WTO impasse ends: Minister says India and US reach agreement on food subsidies

The United States and New Delhi have reached an agreement on their ‘impasse’ over Indian food subsidies that blocked a key World Trade Organization (WTO) agreement earlier this year, commerce minister Nirmala Sitharaman said on Thursday. "India and the US have successfully resolved their impasse over food security issues in #WTO," Sitharaman tweeted. "WTO General Council will receive India’s proposal and US will support us."

At the end of July, Prime Minister Narendra Modi pulled the plug on implementing a Trade Facilitation Agreement (TFA) struck in Bali last year, linking it to the emotive issue of rural poverty.

The government had wanted indefinitely to extend a ‘peace clause’ to protect a subsidised food distribution scheme until the WTO could strike a definitive deal on stockpiling. In Bali, the WTO agreed that the clause would expire in four years.

The trade row had isolated Asia’s third-largest economy and plunged the WTO into its worst crisis in two decades, as countries led by the US considered abandoning the principle of consensus under which the 160-nation group works.

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India has repeatedly reiterated its commitment to trade facilitation agreement: Nirmala Sitharaman

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In a nutshell, India is facing flak, mostly from the western world, for holding up the TFA under the WTO. It did so because it wants to first settle the question of flexibility to buy and stock as much food as it wants from its farmers. This is important to ensure the implementation of the Food Security Act.

Current WTO rules cap subsidies to farmers at 10% of the total value of farm production based on 1986-88 prices.

India wants the base of calculating food subsidies updated to current price levels, taking into account inflation and currency movements. Otherwise, the government would not be able to provide subsidised food to some 67% of its 1.2 billion people it wishes to cover under the food security law.

‘Peace clause’ helps India, US resolve food subsidy row, WTO impasse ends

HT Correspondent, Hindustan Times New Delhi, November 13, 2014

First Published: 11:24 IST(13/11/2014) | Last Updated: 16:12 IST(13/11/2014)

परोपकाराय फलन्ति वृक्षा: परोपकाराय वहन्ति नद्यः।

परोपकाराय दुहन्ति गावः परोपकाराय इदं शरीरम्।।


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