Statement by Nirmala Sitharaman in Lok Sabha Regarding "India's Stand in the WTO"
1. I am
making this intervention in the House today in order to place before the
Hon'ble Members the facts relating to the stand taken by India in the World
Trade Organization (WTO) recently.
Bali Ministerial Declaration was adopted on 7 December 2013 on conclusion of
the Ninth Ministerial Conference of the WTO in Bali. Ministerial Decisions were
adopted on ten issues relating to the Doha Development Agenda which is the
agenda for the unfinished Doha Round of trade negotiations, underway in the WTO
Amongst these Ministerial Decisions, two are of particular significance — the Ministerial
Decision for an Agreement on Trade Facilitation and the Ministerial Decision on
Public Stockholding for Food Security Purposes.
Trade Facilitation Agreement is basically aimed at greater transparency and
simplification of customs procedures, use of electronic payments and risk
management techniques and faster clearances at ports. We have autonomously
taken several similar measures such as the 'Indian Customs Single Window
Project' announced in the Budget 2014-15 to facilitate trade, under which
importers and exporters will be able to lodge documents at a single point,
reducing interface with Governmental agencies, dwell time and the cost of doing
Protocol of the Trade Facilitation Agreement (TFA) was to be adopted by 31 July
2014 by the WTO. After this the Agreement would automatically come into force
from 31 July 2015 if ratified by two-thirds of the members of the WTO.
contrast to their efforts on Trade Facilitation in the WTO, some developed
countries have been reluctant to engage on other issues.
Seeing the resistance to taking forward the other Decisions, the apprehension
of developing countries was that once the process of bringing the Trade
Facilitation Agreement into force was completed, other issues would be ignored,
including the important issue of a permanent solution on subsidies on account
of public stockholding for food security purposes.
India, therefore, took the stand that till there is an assurance of commitment
to find a permanent solution on public stockholding and on all other Bali
deliverables, including those for the Least Developed Countries (LDCs), it
would be difficult to join the consensus on the Protocol of Amendment for the
Trade Facilitation Agreement.
Without a permanent solution, public stockholding programmes in India and other
developing countries will be hampered by the present ceiling on domestic
support which is pegged at 10 per cent of the value of production and is
wrongly considered as trade-distorting subsidy to farmers under existing WTO
rules. The existence of such a subsidy element is determined by comparing
present day administered prices with fixed reference prices of the 1986-88
period which is unrealistic.
problem is a very real one. Developing countries are finding themselves
hamstrung by the existing rules in running their food stockholding and domestic
food aid programmes. The developed world too had market price support
programmes and was able to move away from such support - though not fully even
now - because of their deep pockets. This is not possible for developing
countries. It is important for developing countries to be able to guarantee
some minimum returns to their poor farmers so that they are able to produce
enough for themselves and for domestic food security.
Developed countries continue to have large entitlements to provide support to
farmers. These would have been cut in the Doha Development Round which
unfortunately remains unfinished. Had this Round, which has development at its
core, concluded as per the agreed timelines and its development agenda, the
world would have had an outcome in a single undertaking in which competing
interests could have been balanced. Today, developing countries are fighting to
keep the negotiations focused on development against the single-minded
mercantilist focus of most of the rich developed world on market access issues.
Overall balance is important even in a limited package of outcomes. The Bali
outcomes were negotiated as a package and must be concluded as such.
is regrettable indeed that today the WTO is unable to agree even to fast track
negotiations on an issue of such importance to millions of subsistence farmers
across the developing world, while the rich world can continue to subsidise
their farmers unabatedly.
matter came up for discussion in the margins of the BRICS Trade Ministers
meeting in Brazil on 14 July and the G20 Trade Ministers meeting in Sydney on
19 July. It was also raised by the representatives of some countries in their
interactions with the Indian government. On each occasion I explained that
India is a signatory to the Bali Decisions, including Trade Facilitation and is
not standing in the way of its implementation but is seeking an equal level of
commitment and progress in working on the issue of public stockholding which
affects the country's livelihood and food security. A permanent solution on
food security is a must for us and we cannot wait endlessly in a state of
uncertainty while the WTO engages in an academic debate on the subject of food
security which is what some developed countries seem to be suggesting before
they are ready to engage on this important issue.
Food security is a humanitarian concern especially in these times of
uncertainty and volatility. Issues of development and food security are
critical to a vast swathe of humanity and cannot be sacrificed to mercantilist
Developing countries such as India must have the freedom to use food reserves
to feed their poor without the threat of violating any international
obligations. This is our sovereign right. It is our duty to protect our
citizens' fundamental rights to life and livelihood.
Agriculture is the mainstay of the Indian population. In a country of the size
of India with 60% of the population dependent on a relatively unremunerative
agriculture sector, we cannot give up administered prices. This is the only way
we can procure food for the Public Distribution System (PDS), the central
pillar on which our efforts to ensure food security, rest. Public stockholding
is a widely used means to ensure food security in many developing countries
where agriculture is largely rainfed.
have to look after both consumer and producer interests. We have to enable our
people to live a life of dignity by ensuring access to an adequate quantity of
quality food at affordable prices.
25 July 2014, India made a statement in the WTO General Council conveying, inter
alia, that the adoption of the TF Protocol must be postponed till a
permanent solution on public stockholding for food security is found.
India offered suggestions on the procedure to be followed in order to ensure
time-bound delivery of an outcome on public stockholding for food security. We
also urged that a similar approach be adopted on all other elements of the Bali
Package notably the LDC issues.
integrity of India's stand is reflected in our unwavering efforts to offer a
way forward in the face of criticism. Even on 31 July 2014, India offered a way
to achieve not only a permanent solution on the issue of public stockholding
for food security but also to implement the Trade Facilitation Agreement in the
agreed timeframe as well as deliver favourable outcomes for LDCs.
have offered practical suggestions for the way forward. The issue of a
permanent solution on public stockholding is a simple one that can be addressed
very easily as there are already several proposals on the table. A solution to
this simple problem will be a tremendous relief for millions of farmers and
However, despite India's efforts, our concerns were not satisfactorily
Director General of the WTO reported to an informal meeting of the Trade
Negotiations Committee on 31 July 2014 that a solution could not be found to
bridge the gap.
General Council meeting was, thereafter, formally declared closed without
adopting the TF protocol.
India stood firm on its demands despite immense pressure. The Government of
India is committed to protecting the interests of our farmers against all odds.
Our farmers work in extremely adverse conditions, most of them at the mercy of
the vagaries of the monsoon, aggravated today by climate change. For farmers in
many developing countries farming is a subsistence activity, not a commercial
one. We are committed to their welfare and I am grateful for the support and
understanding extended by farmers' organizations in this cause.
must also thank Hon'ble Members of Parliament, many civil society groups and
academicians who have lent their voice in support of the Government's efforts
to ensure a fair deal.
is evident from the expressions of support that India's stand has resonated
across the world and I take this opportunity to also thank the countries that
have stood by India in the VVTO.
India is an unwavering votary of the multilateral trading system and we
reiterate our commitment to the WTO. We continue to believe that it is in the
best interest of developing countries, especially the poorest, most
marginalized ones among them and we are determined to work to strengthen this
institution. The timely correction of any imbalances or anomalies in the
working of the system or its rules is critical to ensure that the WTO works
impartially and fairly in the interest of all its Members and not just a select
am confident that India will be able to persuade the WTO Membership to
appreciate the sensitivities of India and other developing countries and see
their way to taking this issue forward in a positive spirit. This would be a
major contribution by this institution towards 'meeting the global challenge of
food insecurity and would convey -a strong message that .the WTO is genuinely
committed to the cause of development.