WTO’s 13th Ministerial Conference (MC13), Abu Dhabi
Key Outcomes
The World Trade Organization’s 13th Ministerial Conference (MC13) in Abu Dhabi concluded without a permanent solution to the Public Stockholding (PSH) issue, a demand raised prominently by India.
Public Stockholding (PSH) Policy
Objective:
- The PSH policy enables governments to procure crops from farmers at the Minimum Support Price (MSP).
- It allows for the storage and distribution of these food grains to the poor, ensuring food security and stabilizing farmer incomes.
De Minimis Limits
Under global trade norms:
- Developing Countries: Subsidy bill should not exceed 10% of the total value of agricultural production.
- Developed Countries: Subsidy bill should not exceed 5%.
- Reference Price: Currently calculated based on prices from 1986-88, which doesn’t reflect current market prices.
Peace Clause & India’s Stand
Peace Clause
- Origin: Agreed at the 9th Ministerial Conference (MC9) in Bali.
- Purpose: An interim solution to allow countries to continue PSH programs without facing legal challenges at the WTO.
- Duration: Initially valid until MC11, but extended due to lack of consensus among members.
India’s Demand
- Permanent Solution: India is advocating for a lasting resolution to the PSH issue.
- Proposed Measures:
- Amendments in the calculation formula for the food subsidy cap.
- Updating the reference price to reflect current market realities.
Importance of a Permanent PSH Solution for India
- Legitimizes Higher Subsidies: Allows developing countries to provide greater support to their farmers without breaching WTO rules.
- Protects Vulnerable Farmers: Ensures that poor and marginalized farmers receive fair prices and support.
- Addresses Food Security Needs: Enables the country to meet domestic food security requirements effectively.
WTO’s Domestic Support Categories (Boxes)
Amber Box
- Definition: Domestic support measures considered to distort production and trade.
- Examples: Price supports like MSP.
- Requirement: Subject to reduction commitments under WTO agreements.
Blue Box
- Definition: Subsidies that would be in the amber box but include programs to limit production.
- Purpose: Used to reduce agricultural surpluses.
Green Box
- Definition: Subsidies that must not distort trade or cause minimal distortion.
- Examples: Environmental protection programs, research, disaster relief.
- Flexibility: Not subject to reduction commitments.
Fisheries Subsidies Agreement
WTO Agreement on Fisheries Subsidies: The Geneva Package
Overview
- Adopted During: The 12th Ministerial Conference (MC12) in 2022 in Geneva, Switzerland.
- Goal: To curb harmful subsidies contributing to overfishing and depletion of fish stocks.
Current Status
- Ratification Requirement: Needs acceptance from two-thirds of WTO members to come into effect.
- Deadline: Short by 39 countries as of March 2024.
- India’s Position: Not a part of the agreement, expressing concerns over impacts on its small-scale fishing communities.
Benefits of the Agreement
- Sustainability of Marine Resources:
- Prohibits subsidies to illegal, unreported, and unregulated (IUU) fishing.
- Restricts subsidies for fishing overfished stocks.
- Limits subsidies for fishing on the unregulated high seas.
Special and Differential Treatment (S&DT)
- Provision for Developing Countries and LDCs:
- A 2-year transition period from the date of the agreement’s entry into force.
- Purpose: To acknowledge the developmental needs and allow time for adjustment.
Principles for Successful Fisheries Subsidy Negotiations (WWF Guidelines)
- Comprehensive Coverage:
- Include all significant fishing subsidy programs.
- Elimination of Harmful Subsidies:
- Forbid subsidies that negatively impact fish stocks while allowing beneficial ones.
- Consideration for Developing Countries:
- Account for the special needs and capacities of developing nations.
- Fisheries-Specific Management:
- Administer subsidies on a per-fishery basis to address specific issues.
- Transparency and Accountability:
- Implement mechanisms to improve monitoring and compliance.
- International Coordination:
- Collaborate with international fisheries bodies for effective management.
Significance for UPSC Exam Preparation
- Economic and Trade Policies:
- Understanding WTO negotiations is crucial for topics in International Trade and Indian Economy.
- Agricultural Policies:
- Insights into how international agreements affect domestic agricultural support and food security.
- Sustainable Development:
- The intersection of economic interests and environmental sustainability.
- Indian Diplomacy and Negotiation Strategies:
- How India balances its developmental needs with global trade commitments.
Additional Topics for Study
- Minimum Support Price (MSP) Mechanism:
- Role and impact on Indian agriculture.
- Food Security in India:
- Policies and programs aimed at ensuring food availability and affordability.
- WTO and India:
- Historical context of India’s participation and stances in WTO conferences.
- Sustainable Fishing Practices:
- India’s initiatives towards responsible fishing and conservation.
