WTO Conference at Buenos Aires – The Challenges ahead
iasparliament
December 11, 2017
Why in news?
World Trade Organisation’s 11th biennial Ministerial Conference is going to be held in Buenos Aires, Argentina.
What are major areas of contention?
Focus will be on the new rules on farm subsidies, removing support for unsustainable fisheries and the regulation of e-commerce.
Agri Subsidy Issue - There is a plan for Indo-China joint proposal with the backing of over 100 developing countries.
This is to vouch for the elimination of trade-distorting farm subsidies worth $160 billion in several industrialised economies.
This is seen as a prerequisite to address the prevailing imbalance in the WTO ‘Agreement on Agriculture (AoA)’, which unfairly benefits developed countries.
Public Stocking - Contrarily, countries like US & Canada insist on restricting public food grains stock-holding programs.
They believe large public stock-holdings and subsidies like ‘Minimum support Price (MSP)’ & ‘Public Distribution System (PDS)’ will distort the market.
But most developing countries (G-33 coalition) consider large stockholding is needed to strengthen their food security.
G-33 coalition (Indonesia, China, India etc...) is hence not willing to either restrict stocking or scrap subsidy programs for poverty-alleviation.
Bali Peace Clause - While the stock-holding issue came up in the 2013 Bali WTO plenary, a temporary peace clause was agreed upon for 4 years.
It said that, till 2017, no country would be barred from food security programmes even if the subsidy breached the limits specified by WTO.
As a solution has not been reached yet, countries that have such food security programs face the risk of legal prosecution.
What are the challenges?
The high stake India-China joint proposal risks unravelling the negotiations as India looks stubborn on its position currently.
Contrarily, EU & Brazil seem willing to endorse the G-33’s position on public stock-holding in return for support for reduction in trade-distorting subsidies.
Also, U.S. is currently being piloted by an administration that seeks to undermine the WTO and is increasingly protectionist in its approach.
US is already exploring unilateral alternatives to the formal dispute resolution mechanism of the WTO to settle trade conflicts with partners.
