INDIA AND THE WTO IN THE CONTEXT OF AGRICULTURE HOW IS WTO DIFFERENT FROM GATT?

WTO IS GATT PLUS

WTO covers areas well beyond GATT

* Textile and Agriculture * Intellectual Property

Rights * Services * Investment

BASIC PRINCIPLES OF WTO

*Protection

to domestic industry through tariffs. *Binding of tariffs. *Most Favoured Nation (MFN) Treatment. *National Treatment

WORD TRADE ORGANISATION

How to make the best of it? WORLD TRADE ORGANISATION *Was there any option available?
JOINING WTO. EVEN IF THERE WAS AN OPTION AVAILABLE
*With regard to Agreements in General and Agreement on

Textiles and TRIPS in particular *With regard to Agreements on Agriculture

MISAPPREHENSIONS ABOUT WTO

*Potential

benefits of Agreement on Agriculture *Removal of Quantitative Restrictions.

UNDERSTANDING AGREEMENT ON AGRICULTURE (AOA)

AGREEMENT ON AGRICULTURE (AOA)

*AOA and the Agreement on
Application on Sanitary & Phytosanitary Measures were negotiated in parallel *Decisions on measures concerning the possible negative effects of the reform programme on least developed and net food importing developing countries also part of the package.

THREE MAIN ELEMENTS OF THE

*Market

Access *Domestic Subsidies *Export Subsidies

AGREEMENT

In addition, special concerns of developing countries and net food importing countries are also addressed.

MARKET ACCESS
*Tariffication of Non Tariff Barriers
(NTBs) *Reduction of Tariffs

*By a simple average of 36% over 6 years for

developed countries

*By a simple average of 24% over 10 years for

developing countries

*Minimum Access *Not less than 3%, rising to 5% by 2004 for

developing countries

* Not less than 3%, rising to 5% by 2004 for

developing countries

DOMESTIC SUPPORT
*Aggregate Measurement of Support
(AMS)

*Product Specific *Non-Product Specific

De Minimis Provisions

*Three Categories of Domestic Support *Green Box Measures *Blue Box Measures *Amber Box Measures

DOMESTIC SUPPORT

Green Box measures include all publically funded government programmes which do not provide price support to producers. For example, research, pest and disease control, marketing and promotion services, infrastructure, public stock holding, payments under environment programmes etc. These measures are considered least trade distorting and hence are exempt from reduction.

DOMESTIC SUPPORT
*Blue Box measures refer to direct
payments under production limiting programmes, which are also not subject to reduction commitments. *Amber Box measures include product

specific support as well as nonproduct specific support extended to the farm sector. These are subject to reduction above the de minimis level.

DOMESTIC SUPPORT
Other exemptions include: *Investment subsidies in the Agriculture sector *Input support to low income/resource poor farmers *Support for diversification from illicit narcotic crops

EXPORT SUBSIDY
*Prohibited

*Otherwise subject to reduction

commitments *Value of Subsidy
By 36% over 6 years for developed countries By 24% over 10 years for developing countries No reduction for least developed countries

*Quantity of Export
By 21% over 6 years for developed countries by 14% over 10 years for developing countries No reduction for least developed countries

NOTIFICATION OBLIGATIONS
*Members bound to notify changes in
Market Access, Export Subsidies and Domestic Support *India notifies

*AMS *Product Specific for 19 crops *Non product specific: Fertilizer, Irrigation *Green Box *Special & differential , provisions for low
income/ resource poor farmers
Electricity and seeds

INDIAS COMMITMENTS
*Market Access *No tariffication; ceiling bindings of *100% for primary commodities *150% for processed agricultural *300% for edible oils
Cont----/---products

INDIAS COMMITMENT
*Domestic Support *Price Support for 19 products *AMS is negative by a large margin
and below De Minimis

*Export subsidy *India does not have these. *No commitments

WHAT HAS HAPPENED SO FAR?

GROWTH OF AGRICULTURAL EXPORTS IN POST-WTO PERIOD

TRENDS IN AGRICULTURAL TRADE OVER THE LAST TWO DECADES CHANGES IN UNIT EXPORT PRICES (DOLLAR PER KG) WTO DOMESTIC SUPPORT NOTIFICATIONS ($ BILLION)
ESTIMATES OF SUPPORT TO AGRICULTURE IN OECD (FIGURES IN US DOLLARS BILLION)

PERCENTAGE AGGREGATE MEASURE OF SUPPORT BY MAJOR COUNTRIES INDIAS AGGREGATE MEASUREMENT OF SUPPORT (RS. CRORES)

*EU,

MAJOR COUNTRY POSITIONS

Japan and certain Nordic countries advocating multifunctionality in an attempt to continue with the high degree of protection currently available to their agriculture. *Cairns Group of agriculture exporting countries (18) calling for substantial reduction in tariffs, domestic support and elimination of export subsidies.

*United States looking for greater

market access for its products, championing trade in genetically

MAJOR COUNTRY POSITIONS

modified products, calling for reduction in tariffs and trade distorting support. *Developing countries having a difference of opinion keeping in view their status as net importers of food or exporters of agricultural products

S&D PROVISIONS
*Ostensibly designed to create a level playing filed between developed and developing countries *AOA provides S&D treatment favouring the developed countries, i.e. the continuance of Blue Box, export subsidies, unlimited Green Box and

domestic TRQs

support

levels

and

INDIAS OBJECTIVES
*To preserve flexibility in

domestic support policies to ensure food and livelihood security. *To create opportunities for a meaningful expansion of agricultural exports.

PROPOSALS
*As a S&D measure, developing
countries to be allowed to maintain appropriate levels of tariffs

*Developing

countries to retain flexibility for public stock holding and public distribution of food grains *Use of special safeguard in the event of a surge in imports or a decline in prices *Measures for poverty alleviation, rural development and employment to be exempt from AMS.
Cont.

PROPOSALS
*Primary
agricultural commodities like jute, rubber, coir and primary forest produce which provide employment and livelihood to many to be covered by AOA. obligations to provide minimum market access.

*Exemption to developing countries from any

*Historical

*Negative

low tariff bindings to be rationalised commensurate with bindings on similar category of products under the Uruguay Round. product specific support to be allowed to be adjusted against positive nonproduct specific support.
Cont.

PROPOSALS
*To achieve meaningful market access
it is proposed to seek:

*Substantial

reduction in tariffs, tariff peaks and tariff escalation by developed countries of TRQs with preference to developing countries in the interregnum
Cont.

*Eventual abolition of TRQs *Transparent administration

PROPOSALS
*Suitable accounting of all trade
distorting support (e.g. paras 5,6,&7 of Annex 2 and Art. 6.5 of AOA) in the AMS calculations *Elimination of all forms of export subsidies including export credits, guarantees, insurance etc. by developed countries. *Flexibility available to developing countries under ASCM to be preserved in AOA
Cont.

PROPOSALS
*Peace clause not to be extended for developed countries

*Down payment by way of 50% reduction in trade distortion and tariffs by developed countries by the end of 2001 *Retaining and strengthening the existing S&D provisions

WHAT HAPPENED AT DOHA? AT DOHA

Implementation related concerns
*Agreed to negotiate on outstanding implementation issues which shall be an integral part of the work

programme

AT DOHA
Agriculture
*Agreed to a comprehensive negotiation for substantial improvement in market access, phasing out of export subsidies and reducing domestic support.

AT DOHA
Market access for non agricultural products
*Agreed to negotiate for reduction of tariffs, including

peak tariffs and removal non-tariff barriers

of

AT DOHA
TRIPS
*Agreed to consider extension of the protection of geographical indications provided for in Article 23. *Waiver from TRIPs for cheap medicines overriding patents in times of public health emergencies

AT DOHA
Trade & Investment/Trade &

competition/Governme nt procurement/Trade facilitation

*Negotiation to take place but through explicit consensus

AT DOHA
Trade & Environment
*Agreed to negotiate on the relationship between existing WTO rules and specific trade obligations set out in multilateral environment agreements.

FUTURE STRATEGY

FOR DEVELOPING COUNTRIES WITH REGARD TO AGRICULTURE

FUTURE STRATEGY
* Ensure

reduction of AMS and duties in letter and spirit . The implementation issues

*Forge a common platform to change the rules of the game: special and differential

FUTURE STRATEGY

treatment, AMS, reduction of duties. *Proactive preparations for penetrating the markets when the duties and the subsidies come down.

FUTURE STRATEGY

Are we prepared?
*Active participation in Codex meetings. *Forging common platform for SPS related barriers.

FUTURE STRATEGY

FUTURE STRATEGY

*Emphasis on quality within the country the Quality culture has to be developed

FUTURE STRATEGY
*Identify subsidies which are WTO compatible Agri Export Zones are a move in this direction.

FUTURE STRATEGY
Take a fresh look at agricultural commodities which are being supported and move towards such commodities which are market driven rather than State driven

Wheat Rice Sugar

Durum Wheat Basmati Rice Potatoes Onion Eggs