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wto ((India's leadership role at WTO - (India is leading G-33 (48…
wto
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Criticism of WTO -
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In WTO, everybody sink or swim together. Recently, India refused to ratify the agreement on TFA until a permanent solution on the issue of public stock-holding of food is reached. This decision was highly criticised by the developed countries. Even among the developing countries, only Cuba, Bolivia and Venezuela stood with India.
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Doha Development Round
Dec 2013 - 9th MC at Bali, Indonesia. Three main issues -
Trade Facilitation – to reduce administrative barriers to trade like dealing with customs barriers, speedy release from ports and cut transaction costs
Decision relating to Public stock-holding for food security purposes – in a fight against poverty and malnutrition, the G-33 (group of 46 developing countries in the WTO including India) brought this issue in the WTO.
Temporary agreement –it was agreed that let status quo remain till 2017 and after that a permanent solution to Public stock-holding will be taken. Until that let the TFA be ratified
Duty- free, Quota-free market access for LDCs
It is noteworthy that India is not against TFA, but it maintains that food security cannot be compromised.
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Possible Solutions –
Some have suggested replacing the PDS system with cash transfer which is more efficient in distributing subsidy. However, this step should consider the fact that reach and effectiveness of PDS is increasing across many states. In addition, there is problem of financial inclusion
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The WTO is an intergovernmental organization that regulates international trade with the basic philosophy 'Trade for Development'.
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Issue - The dispute revolves around the large amount of subsidy given to the farmers (not to consumers). Article 6 of the AoA states that providing MSP is distorting and is subject to limits. The subsidy arising from minimal supports cannot exceed 10% of the value of agricultural production for developing countries. Therefore, India, on the one hand needs to continue with the PDS to address food security, and on the other, be within the legal bounds of the WTO. However, the benchmark prices used by WTO are decades old (1986-87) and have not been adjusted according to the price rise in the intervening years. This adjustment will automatically bring the subsidy amount given by India within the bounds of WTO.
The agricultural trade rules in the WTO's AoA does not bar public procurement and stock-holding for food security. However, if food for such programmes is acquired at administered prices and not market prices, then this is deemed a support to farmers.
Interim Solution - At 9th Ministerial Conference (MC) at Bali (2013), it was decided that until a permanent solution is found and subject to certain conditions, members were to be protected against litigation in the WTO under the AoA in respect of public stock-holding programmes for food security purposes.
10th MC, Nairobi Kenya (Dec 2015) -
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to seek Special Safeguard Mechanism (SSM) for agricultural products to be protected for developing countries;
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The developed countries have stalled negotiations on a permanent solution to the problem of public stock-holding for food security.
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It include MC's decisions on agriculture, cotton and issues related to LDCs.
Decision to continuously search for permanent solution to pubic stock-holding issue as per Bali Package of 2013
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Elimination of agricultural export subsidies subject to the preservation of S&DT for developing countries
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Enhanced preferential Rules of Origin for LDCs and preferential treatment for LDC service providers.
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India, G-33, LDCs and Africa Group favours Doha round
Food Security - the state of having reliable access to a sufficient quantity of affordable, nutritious food.
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Under this treatment, developed world wants high growth countries like India and China to be categorised differently from other developing countries.
The WTO mandates Special and Differential Treatment (S&DT) to developing countries, which accords longer time periods for implementing WTO agreements and commitments in addition to the provisions safeguarding their trade interests. However, developed world do not want China and India to get the S&DT benefits due to their higher growth rates when compared to the rest of the developing world.
Problem - WTO does not define what constitutes a 'developing' or 'developed' country and allow its members to apply the principle of 'self-election' to decide for themselves if they have to be categorised as a 'developing country'. Other members can question a member on its decision to term itself as a 'developing' country to take advantage of the S&DT benefits. WTO, however, recognises the LDCs as designated by the UN. There are 48 LDCs as recognized by UN.
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its low GDP per capita ($1596 versus $7594 of China and $54,630 of the US); and
high levels of poverty (a quarter of the India population, or about 300 million people which is close the entire population of the US).
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India wants to push for a clear distinction between temporary movement of professionals and (permanent) migration.
Objective is to ease the flow of global services trade, including temporary movement of skilled professionals;
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TFA in Services at the WTO-level, it will ease the negotiations on services at bilateral and regional FTA negotiations
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