The Cabinet will decide on Wednesday whether India would ratify a trade facilitation pact at the World Trade Organisation (WTO).

India has been warning developed countries that it would not give its consent to the agreement, a decision that was taken at a meeting of the WTO trade ministers in Bali last December, unless its concerns on food security are addressed.

“The Prime Minister will take a final call on whether India should insist on a single undertaking at the WTO that would also take care of its food security concerns instead of just agreeing to a trade facilitation pact,” a Commerce Ministry official said.

Trade facilitation is an agreement pushed by a number of developed members, including the US, the EU and Australia, that would put binding commitments on all countries to upgrade their border infrastructure and procedures to make movement of goods smooth. New Delhi is concerned that once developed countries have such an agreement in place, they may not be interested in sorting out its concerns on food security. India and a number of other developing countries want the WTO to consider subsidies given food procurement from poor farmers (used for food aid programmes) as permissible subsidies not subjected to a cap.

In Bali, WTO members agreed to a ‘temporary solution’ to the problem by promising that no action would be taken against developing countries for breaching their farm subsidy levels (fixed at 10 per cent of total produce) till a ‘permanent solution’ was found by 2017.

However, the interim relief is ridden with a number of conditions including submission of production, pricing and other statistics that could make it difficult for developing countries to take advantage of it. Moreover, if developed countries feel that the subsidies were distorting world trade, they could still take action against developing countries.

comment COMMENT NOW