WTO Diary: India, Thailand clash over agricultural subsidies

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Abu Dhabi: The atmosphere is heating up in the WTO talks. Battle lines have been drawn over the issue of agricultural subsidies. The clash between India and Thailand is making headlines here. India and 80 other countries want that they should be allowed to buy subsidised grains to build up stocks. A group of developed and developing countries are opposing this move.

The matter escalated when Thailand’s ambassador to the WTO accused India of buying subsidised grain for the public distribution system and then exporting it.  This is against the rules of world trade.

On this accusation, India boycotted the Thai representative in protest against this statement. Insiders say the Indian side will not participate in any meeting where the Thais are present.

The WTO is now divided into two groups on the matter of agricultural subsidies. The US, Canada and Australia have welcomed Thailand’s statement. These are the countries that have blocked India’s proposal on agriculture.

The issue is quite complicated. Developing countries can buy only up to 10% of their total production of rice on subsidy for food security. This will prevent cheaper rice from being exported. A special provision was agreed upon at the WTO Bali meet on agriculture, under which developing countries were given a concession that they could buy more than the prescribed limit under the peace clause in special circumstances. India has invoked this facility and this is what is being opposed.

India wants a permanent solution to this issue so that the interests of farmers are protected. Developed countries are not willing to agree to any concession in this matter. The tone of the opposition is sharp and there seems to be little hope of agreement.

Pressure cooker of discussions

According to WTO Director-General Ngozi Okonjo-Iweala, the WTO discussions have turned into a pressure cooker. Iweala, known for her witty remarks, said it is a good thing that we are in a pressure cooker because there needs something to come out from these discussions, but there are also dangers of a pressure cooker, let’s see what happens.

Iweala was at a meeting of representatives of private companies at the WTO Business Forum and did not seem very confident about the outcome. She said that “we are hopeful about our efforts, but the truth is that there are many difficult issues that have stalled the talks.”

Today is the last day of talks. If there is a hope of agreement, the discourse can be extended by one day.