First things First: Words Frequently appear in media
a. Food Security: is a condition that "exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life"
b. Import Dependent developing Country: Countries which are heavily dependent on imports but developing countries, unlike countries like Nauru- import dependent but developed country ( though it is a bankrupt now ;))
c. Food Price inflation: General increase in price levels of food items. It gets amplified for import dependent developing countries with their larger balance of payment problems.
d. Agriculture Trade Talks: In WTO, open trade is promoted. Agriculture trade ( export, import) related talks between various countries. Major clashes happen here between agriculture dependent developing countries and industrial developed countries. Developed nation dominates here.
e. The G-33 Proposal: It is a proposal by G33 countries ( 33 Industrialised countries) to amend the aspects of stockpiling, subsidy, and other food security measures. It is termed as a sympathetic approach in the new food price scenario.
f. DFQF ( Duty Free, Quota Free): Self explanatory!!
g. Doha Round: (DDA- Doha Development Round): It is the current round of WTO for trade negotiation. The objective is to facilitate the global trade by reducing trade barriers.
h. LDCs ( Least Developed Countries)
i. BoP ( Balance of Payment): Difference of Export and Import of country. Negative BoP is the common problem for LDCs, Developing countries.
Agenda:
Most of the texts that are before us are ostensibly for the benefit of developing countries. In reality, on issues including cotton subsidies, export competition, monitoring mechanism and DFQF, the draft texts contain mere statements of intent with best endeavour provisions. Even in trade facilitation, while financial support for LDCs and some developing countries was considered a core element since the commencement of the negotiations, it has now been diluted with only a weak and non-binding reference in the footnotes.
None of these texts require the developed countries to make binding commitments for the benefit of developing countries. In contrast, developing countries would be required to undertake significant commitments in trade facilitation. If this imbalance in the Bali package is not redressed, the world at large would accuse all of us of collectively making hollow promises and keeping the tank empty on development content.
Historical imbalances in trade rules must be corrected to ensure a rule-based, fair and equitable order."
The issues to ponder here:
Whether India's stand does not hamper the market efficiency? And hence, may be unfair to the participants of the market- especially farmers and end-users?
Does such differential treatment in one situation have a potential to be a precedent for lot of such agreements in future?
a. Food Security: is a condition that "exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life"
b. Import Dependent developing Country: Countries which are heavily dependent on imports but developing countries, unlike countries like Nauru- import dependent but developed country ( though it is a bankrupt now ;))
c. Food Price inflation: General increase in price levels of food items. It gets amplified for import dependent developing countries with their larger balance of payment problems.
d. Agriculture Trade Talks: In WTO, open trade is promoted. Agriculture trade ( export, import) related talks between various countries. Major clashes happen here between agriculture dependent developing countries and industrial developed countries. Developed nation dominates here.
e. The G-33 Proposal: It is a proposal by G33 countries ( 33 Industrialised countries) to amend the aspects of stockpiling, subsidy, and other food security measures. It is termed as a sympathetic approach in the new food price scenario.
f. DFQF ( Duty Free, Quota Free): Self explanatory!!
g. Doha Round: (DDA- Doha Development Round): It is the current round of WTO for trade negotiation. The objective is to facilitate the global trade by reducing trade barriers.
h. LDCs ( Least Developed Countries)
i. BoP ( Balance of Payment): Difference of Export and Import of country. Negative BoP is the common problem for LDCs, Developing countries.
Objective of the Bali Session:
This is a ministerial conference: The topmost decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.Agenda:
- Trade facilitation
- Agriculture negotiations
- Cotton
- Least-developed countries
- Monitoring mechanism
- Small, vulnerable economies
- Yemen's accession
- E-commerce
- “Non-violation” in intellectual property
The focus here is Agriculture negotiation. ( Yemen is added in WTO)
Four issues:
1. Export Subsidies in the broadest sense: Mr. Anand Sharma puts a very valid point here from the perspective of developing countries. The developing countries in principle agree to use these export subsidies ( can be termed as export competition) in the strictest sense possible. However, the articulation is favoring the developed nations.
From Mr. Sharma's Speech:
" We have a half-baked agricultural package, statements of pious intent for Least Developed Countries (LDCs) and several unresolved issues in the trade facilitation agenda.
Most of the texts that are before us are ostensibly for the benefit of developing countries. In reality, on issues including cotton subsidies, export competition, monitoring mechanism and DFQF, the draft texts contain mere statements of intent with best endeavour provisions. Even in trade facilitation, while financial support for LDCs and some developing countries was considered a core element since the commencement of the negotiations, it has now been diluted with only a weak and non-binding reference in the footnotes.
None of these texts require the developed countries to make binding commitments for the benefit of developing countries. In contrast, developing countries would be required to undertake significant commitments in trade facilitation. If this imbalance in the Bali package is not redressed, the world at large would accuse all of us of collectively making hollow promises and keeping the tank empty on development content.
Historical imbalances in trade rules must be corrected to ensure a rule-based, fair and equitable order."
2. Tariff quotas: underfill and special treatment
TRQ are where import duties are lower on quantities within the quotas and higher for quantities outside. They were agreed in the 1986–94 Uruguay Round negotiations as a means of allowing exporters some access to other countries’ markets when the normal (out-of-quota) tariffs on imports are high.
Some countries are concerned that the methods governments use to share these quotas among traders (“TRQ administration”) can become an additional trade barrier. Evidence of this, they say, is when parts or all of the quotas are not used (they are “under-filled”). On the other hand, importing countries often say the underfill is caused by supply and demand in the market (for example, bad harvests in supplying countries or when cheaper local produce is available).
Under the proposal, if a quota is persistently under-filled — and information-sharing and consultations prove fruitless — the importing government would have to apply one of a prescribed set of methods for administering quotas aimed at removing impediments. Either they would accept quantities within the quotas, first come first served, at the importing ports until the quota limit is reached, or they would issue import licences for every request (“automatic licence on demand”) up to the quota limit.
A trade agreement must be in harmony with our shared commitments of eliminating hunger and ensuring the right to food. These are an integral part of the MDGs.
For India food security is non-negotiable. Governments of all developing nations have a legitimate obligation and moral commitment towards food and livelihood security of hundreds of millions of their hungry and poor.
Public procurement at administered prices is often the only method of supporting farmers and building stocks for food security in developing countries. Need of public stockholding of food grains to ensure food security must be respected. Dated WTO rules need to be corrected. The G-33 proposal was mooted precisely for this purpose. "
TRQ are where import duties are lower on quantities within the quotas and higher for quantities outside. They were agreed in the 1986–94 Uruguay Round negotiations as a means of allowing exporters some access to other countries’ markets when the normal (out-of-quota) tariffs on imports are high.
Some countries are concerned that the methods governments use to share these quotas among traders (“TRQ administration”) can become an additional trade barrier. Evidence of this, they say, is when parts or all of the quotas are not used (they are “under-filled”). On the other hand, importing countries often say the underfill is caused by supply and demand in the market (for example, bad harvests in supplying countries or when cheaper local produce is available).
Under the proposal, if a quota is persistently under-filled — and information-sharing and consultations prove fruitless — the importing government would have to apply one of a prescribed set of methods for administering quotas aimed at removing impediments. Either they would accept quantities within the quotas, first come first served, at the importing ports until the quota limit is reached, or they would issue import licences for every request (“automatic licence on demand”) up to the quota limit.
3. Stockholding for food security: interim ‘due restraint’
When governments buy food from farmers at supported prices to build up stocks, that counts as “Amber Box” domestic support — the type that is considered to distort trade by affecting market prices and the quantities produced. In India, it is called Minimum Support Price.
Mr. Sharma puts India's stand clearly:
" Agriculture sustains millions of subsistence farmers. Their interests must be secured. Food security is essential for over 4 billion people. I recall the words of Mahatma Gandhi “There are people in the world so hungry that God cannot appear to them except in the form of bread”. Unlike other areas, the ‘survival’ aspect of agriculture far outweighs any of its ‘commercial’ aspects.
A trade agreement must be in harmony with our shared commitments of eliminating hunger and ensuring the right to food. These are an integral part of the MDGs.
For India food security is non-negotiable. Governments of all developing nations have a legitimate obligation and moral commitment towards food and livelihood security of hundreds of millions of their hungry and poor.
Public procurement at administered prices is often the only method of supporting farmers and building stocks for food security in developing countries. Need of public stockholding of food grains to ensure food security must be respected. Dated WTO rules need to be corrected. The G-33 proposal was mooted precisely for this purpose. "
The G–33 is also proposing to expand the list of “general services” under the “Green Box”, a call from the African Group dating back to 2006. This proved less controversial. Developing countries want more programmes that are relevant to them on the list, and the African Group and G–33 have identified: land rehabilitation, soil conservation and resource management, drought management and flood control,rural employment programmes, issuing land ownership titles and settlement programmes.
Whether India's stand does not hamper the market efficiency? And hence, may be unfair to the participants of the market- especially farmers and end-users?
Does such differential treatment in one situation have a potential to be a precedent for lot of such agreements in future?
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