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India invokes MC9 decision for food security public stockholding
Published in SUNS #9095 dated 6 April 2020 

Geneva 3 Apr (D. Ravi Kanth) — India has invoked, for the first time, the Bali Ministerial Decision on Public Stockholding for Food Security Purposes at the World Trade Organization since it has breached the de minimis level for rice for the marketing  year 2018-2019.

In its notification (G/AG/N/IND/18) filed with the WTO on 31 March, India said its “breach of commitment for rice, a traditional staple food crop, under Article 7.2(b) of the Agreement on Agriculture (AoA) arises from support provided in pursuance of public stockholding programmes for food security purposes which were in existence as of the date of the Bali Ministerial Decision on Public Stockholding for Food Security Purposes (WT/MIN (13)/38).”

At the ninth WTO ministerial Conference (MC9) in Bali, Indonesia, in 2013, trade ministers had agreed on a interim peace clause which was further clarified at the General Council in 2014.

The Bali Peace Clause stated:

“1.  Members agree to put in place an interim mechanism as set out below, and to negotiate on an agreement for a permanent solution for the issue of public stockholding for food security purposes for adoption by the 11th Ministerial Conference.

“2.  In the interim, until a permanent solution is found, and provided that the conditions set out below are met, Members shall refrain from challenging through the WTO Dispute Settlement Mechanism, compliance of a developing Member with its obligations under Articles 6.3 and 7.2 (b) of the Agreement on Agriculture (AoA) in relation to support provided for traditional staple food crops in pursuance of public stockholding programmes for food security purposes existing as of the date of this Decision, that are consistent with the criteria of paragraph 3, footnote 5, and footnote 5&6 of Annex 2 to the AoA when the developing Member complies with the terms of this Decision.”

And for notification and transparency, the Bali interim peace clause has set the following conditions:

“A developing Member benefiting from this Decision must comply with the following transparency conditions:

1. have notified the Committee on Agriculture that it is exceeding or is at risk of exceeding either or both of its Aggregate Measurement of Support (AMS) limits (the Member’s Bound Total AMS) or the de minimis level as result of its programmes mentioned above;

2. have fulfilled and continue to fulfil its domestic support notification requirements under the AoA in accordance with document G/AG/2 of 30 June 1995, as specified in the Annex;

3. have provided, and continue to provide on an annual basis, additional information by completing the template contained in the Annex, for each public stockholding programme that it maintains for food security purposes; and

4. provide any additional relevant statistical information described in the Statistical Appendix to the Annex as soon as possible after it becomes available, as well as any information updating or correcting any information earlier submitted.”

By notifying the perpetual peace clause (until the permanent solution is reached), India has complied with the Bali decision, said a trade envoy, who asked not to be quoted.

India said it has consistently notified public stockholding programmes for food security purposes (covering rice and a number of other commodities) since 1995.

New Delhi has made it clear that its food security program “is consistent with the criteria of paragraph 3, footnote 5, and footnote 5&6 of Annex 2 to the AoA.”

Further, the stocks procured for public stockholding are “released in order to meet the domestic food security needs of India’s poor and vulnerable population, and not to impede commercial trade or food security of others,” India argued.

More importantly, India said the breach of the de minimis limits for rice is covered by the peace clause set out in the Bali Ministerial Decision on Public Stockholding for Food Security Purposes (WT/MIN (13)/38) and the General Council Decision (WT/L/939).

The General Council decision reached in November 2014, further modified the Bali decision by stating that: “Until a permanent solution is agreed and adopted, and provided that the conditions set out in paragraphs 3 to 6 of the Bali Decision are met, Members shall not challenge through the WTO Dispute Settlement Mechanism, compliance of a developing Member with its obligations under Articles 6.3 and 7.2(b) of the Agreement on Agriculture (AoA) in relation to support provided for traditional staple food crops in pursuance of public stockholding programmes for food security purposes existing as of the date of the Bali Decision, that are consistent with the criteria of paragraph 3, footnote 5, and footnote 5 and 6 of Annex 2 to the AoA.”

Further, the GC decision said unambiguously that “if a permanent solution for the issue of public stockholding for food security purposes is not agreed and adopted by the 11th Ministerial Conference, the mechanism referred to in paragraph 1 of the Bali Decision, as set out in paragraph 1 of this Decision, shall continue to be in place until a permanent solution is agreed and adopted.”

India informed the WTO’s Agriculture Committee that barring for rice, all other products such as coarse cereal, cotton, groundnuts, pulses, rapeseed/mustard, soybean, sunflower, and wheat are under the 10% de minimis limit.

In the case of rice, India has crossed the value of production of USD 4.3 billion by almost one billion dollars. India said the value of its rice production, which it notified for the first time, now stands at a little over USD 5 billion.

It remains to be seen how the US, Thailand, and Vietnam, major rice producers, will react when members return to the WTO Committee on Agriculture meeting after the COVID-19 subsides. The US has already been campaigning heavily against India’s support, suggesting that India has already breached the de minimis limits for rice and wheat.

The US, however, conveniently forgets that it has room under its AMS (aggregate measurement of support Uruguay Round commitment) which is not available to India. India cannot avail of AMS since it has not notified in the Uruguay Round, said a trade envoy, who asked not to be quoted.

Further, the US as well as several members of the Cairns Group of farm exporting countries might say that the perpetual peace clause is not a covered agreement. If that is the case, India could say the moratorium for not levying customs duties on electronic transmissions is also not a covered agreement, the trade envoy suggested. +

 


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