The stand of the Government of India on the Trade Facilitation Agreement, thrashed out during the 9th ministerial conference in Bali in December ( 5- 7),2013 seems to have created a further negotiating opportunity for developing countries and least developed countries. However, the Director General of WTO, Mr. Roberto Azevedo and many countries expressed strong reservation against India’s refusal to sign the Bali Trade Facilitation Agreement before the stipulated dead line on 31st July, 2014. The so-called Bali Package, which includes the Trade Facilitation agreement, emerged during the marathon multilateral negotiations was supposed to make the WTO more effective and credible ; and all members of WTO were expected to finalize and sign the Trade Facilitation Agreement before 31 July 2014. The unwillingness of India to sign the Trade Facilitation Agreement has created a sense that World Trade Organisation is once again in crisis. However, the government of India wanted more negotiating space with regard to food subsidies and stock-piling, before fully signing on the new Trade Facilitation Agreement. While the United States America, EU and Australia criticized India and many members of WTO even proposed to go forward with the Bali Trade Facilitation Agreement, India’s stand received support from Bolivia, Cuba and Venezuela . New Zealand indicated that WTO agreement can’t go forward without India on board. On the one hand the stand of the new government is in continuation of the India’s stated position on domestic agricultural support, including public procurement and food subsidy and on the other hand the tough stand taken by India that Trade Facilitation Agreement can only be signed along with the parallel pact on allowing India’s position on food subsidy and stock-piling ( public procurement of food grains above market price) provide a new window of opportunity for the government to further negotiate within the WTO. Hence, the stand of the government of India is both strategic and reasonable and can potentially give a window of opportunity for the least developed countries and many developing countries to further negotiate to protect the interests of millions of farmers and poor people in their respective countries. However, one has to wait and watch to what extent the Government of India would be able to stick to its bargaining ground within the context of the Trade Facilitation Agreement. Many of the skeptics consider the stand of the present government is to create a smoke screen to buy some more time so as to privatize the procurement system. While many of the activists are skeptical about the genuine intention of the of the government of India in the WTO negotiation, the fact of the matter is that the present position of the government is in consonance with the earlier policy-framework and certainly provides one more opportunity to negotiate. When it comes to the international trade negotiations, one has to consider the political economy of international political relations rather than merely taking a stand on the basis domestic political consideration. One does not have to agree with what all the government does or say to take a position on India's stand on international trade negotiations, particularly when it comes to food subsidy and procurement.
It is rather an exaggerated perception that WTO would collapse just because India's conditional stand that it would sign the TFA along with the parallel pact on provisions( food subsidy and procurement of food grains beyond the prescribed cap of 10%) to ensure food security to its people. The world trade organisation was formed on 1 January 1995 based on the Marrakesh Agreement after the successful completion Uruguay Round (1986-94) of Negotiation (8th round of GATT) of negotiation under the General Agreement on Trade and Tariff. Now WTO has 160 members including countries and other entities such as EU and 24 observer governments. From the very beginning of the proposal for an International Trade Organisation (along with the World Bank and international monetary fund) in the Breton woods conference in the aftermath of the Second World War, there was serious disagreement on the issue of multi-lateral trade agreement. It is due to this difficulty that General Agreement on Trade and Tariff (GATT) was introduced as an agreed international framework that served as the primary international instrument till the birth of WTO in 1995. From its very first ministerial meeting in Singapore in 1996, WTO faced the challenge of bringing everyone on a level playing field as most of the developed countries wanted to use WTO as a means to open up the markets of the developing world for their good, services and products. The third WTO ministerial conference in Seattle, in 1998, faced the first global protest of citizens and civil society and ended up a failure. And it is because of fear of the protest the next ministerial conference of WTO was held in Doha and the Doha development round of negotiation with a comprehensive agenda commenced in 2001. However, Doha round faced stumbling block and the main stumbling block along with others was the Agreement on Agriculture. So the point was WTO has always been going through the thick and thin of negotiations ever since its formation almost two decades ago. Every time, when the developing countries (under G 20 or G 33) raised an objection, the rich countries under the leadership of USA and EU will have the same counter strategy saying that WTO would collapse. But WTO did not collapse. Now just because India refused to play the ball, the general outcry in the American- European media is that India ditched WTO and it would face a collapse. This is simply a counter strategy by the Euro-America trade axis to pressurize India to sign on the dotted line, without a hard negotiation.
The major bone of contention within the Doha Development Round of WTO has been the Agreement of Agriculture and the issues of export subsidies on agriculture products by Rich countries and domestic support for agriculture by developing countries. In countries like India, Agriculture is a means of food and livelihood for more than seventy percent of the population. India can't afford to compromise its stand on the right to food security. For those countries ( USA, EU, Australia etc) where Agriculture is more of an industry to export food and USA and EU has been giving billions of dollars( as per various estimates 60-70 billion dollars annually) subsidy for big farming companies and also export subsidies to export food grains at much cheaper price. But in the least developed countries and significant number of developing countries, agriculture is not only a means of livelihood of the majority of people but also ensures the basic right to food. So it is imperative for the least developed countries and countries like India (which still got the largest number of poor people), to protect the interests of farmers as well as ensuring food security for millions. Hence for India, the first and foremost issue is that agriculture is important to feed more than a billion people and the lives and livelihood of large sections of the rural populations (in most of the Indian states) depend on agriculture. The parliament of India passed the food security act in 2013 and this requires procurement of food grains (stock-piling is the technical term) and food subsidy to ensure right to food to all people, particularly poor and marginalized.
India has always (before Bali, during Bali negotiation) opposed this limit for food subsidy and public procurement and demanded a parallel pact, which would allow developing countries to continue subsidizing and stockpiling food. During the tactful truce( negotiated by the initiative of the USA) during the 9th ministerial in Bali, WTO members agreed to not file complaints against India’s food-subsidy program until a permanent solution is worked out by December 2017. However the new NDA government in India has demanded a more immediate solution, preferably by the end of 2014, in exchange for signing the TFA
When India raised these objection in Bali in December 2013, India was eventually given a 'four-year' window( by 2017) to settle the issue of Stock-piling ( and food subsidy. .The WTO-imposed deadline to sign the protocol by member countries was July 31 of 2014 , following which it was meant to come into effect from July 2015. However, India's veto has now stalled the finalization of the so-called Bali Package on Trade Facilitation Agreement. India's stand is that this can still be negotiated and finalized during the next ministerial meeting or in September (though India is still insistent on signing a parallel pact along with TFA) .By agreeing to TFA, India has to reform/change its customs laws and also reduce custom duty/tariff on many items (including food grains) and ensure internationally approved electronic clearing facility (to avoid red-tapism and 'corruption etc) in all ports and airports. This also means significant new investment. The new government insisted that the India should be allowed to have the provision for food subsidy and stock -piling (instead of waiting up to 2017) before agreeing to sign on TFA. In a way, this is very much a continuation of the negotiating strategy India adopted ever since the beginning of the Doha Round in 2001.
During the Bali WTO ministerial December 2013 India continued to insist its stand on food subsidy and stock-piling (public procurement of food grains). Most of the developed countries opposed this. In Bali, eventually even Brazil and China did not support India’s position. However, India's stand was supported by South Africa, Argentina, Kenya and Nigeria and many other countries. It is true that government of India agreed to sign the Trade Facilitation Agreement , with the assurance of resolving the issue of food subsidy and stock piling by December 201y. However, once India signs the TFA in July 2014, it is binding on us and FTA will be in operation by July 2015. And then in 2017 we will have less 'bargaining' option after already sign the TFA in July 2014. So if we don’t negotiate the issue of food subsidy and stockpiling now, India may get in to a negotiation trap in 2017 and it will have huge political implications in the context of a country wherein food subsidy, PDS and public procurement are important policy measures to protect the small and medium scale farmers as well as to ensure food security to the poor and marginalized. Hence, my own stand is that parallel pact and TFS should be agreed simultaneously. While the present negotiating position of government of India is in continuation of its policies and the decision is strategic in nature, the key question is to what extent the government of India can also be able to make a collective bargain to support the cause of the least developed countries and other developing countries where agriculture is a means of livelihood and food for the large majority of farmer, agricultural labours and poor. The question is whether India can stand up to the sheer international pressure exerted by the rich and power countries. The question also whether India would be able to play a leadership role at the international level in trade negotiation without compromising the interests of hundreds of millions of marginal and small scale farmers in the least developed and developing countries.