India, US ask officials to urgently start consultations on WTO
Friday, 3 October 2014
WASHINGTON, Oct 2 (PTI): Seeking to end the impasse in the World Trade Organisation, India and the US have directed their officials to "urgently" start consultations with other WTO members to work out the next step.
India's tough stand led to impasse in the WTO. New Delhi had decided not to ratify WTO's Trade Facilitation Agreement (TFA), which is dear to the developed world, without any concrete movement in finding a permanent solution to its public food stock-holding issue for food security purposes.
"The leaders discussed their concerns about the current impasse in the WTO and its effect on the multilateral trading system, and directed their officials to consult urgently along with other WTO members on the next steps," said a joint statement issued after talks between Prime Minister Narendra Modi and US President Barack Obama.
India has asked WTO to amend the norms for calculating agriculture subsidies so that the country could continue to procure foodgrains from farmers at minimum support price and sell them to poor at cheaper rates without violating the norms.
The current WTO norms limit the value of food subsidies at 10 per cent of the total value of foodgrain production. However, the quantum of subsidy is computed after taking into consideration prices that prevailed two decades ago.
There are apprehensions that India may breach the 10 per cent after the full implementation of its food security programme.
According to a WTO filing, India has provided a total farm subsidy of USD 56 billion, of which trade distorting subsidy amounts to only USD 13.8 billion for 23 commodities, including rice and wheat.
In case of paddy, the subsidy provided by the Indian government during 2010-11 worked out to be only around 6 per cent of the total output of the commodity in value terms. For wheat, the subsidy is negative one per cent.