The US wants to introduce the concept of ‘differentiation’ of developing countries in the WTO negotiations on agriculture, a move that has been rejected by countries like India and China.
The concept of ‘differentiation’ makes a distinction between developing countries that have existing domestic support programmes in agriculture that could influence global trends and other developing countries which do not have such schemes.
In the WTO General Council meeting, the US said that some studies have indicated that US will have to make significant cuts in its outlay for domestic support under the present draft modalities and termed it as “blood for water” or “blood for air”.
Referring to India and China, the US said that trade distorting payments have expanded exponentially since 2008 but these countries do not have to do much to reduce their subsidies. This outcome that America cannot endorse, it added.
Some US farm lobbies, based on a study of five developing nations—China, India, Brazil, Turkey and Thailand—by an agricultural trade lobbying firm DTB Associates, had said that these countries have breached the maximum aggregate measure of support (AMS) and have increased their minimum support prices for crops.
Under the Doha Declaration, special and differential treatment for developing countries is integral to enable the countries to meet their needs particularly food security.
Developing countries like India and China have rejected the concept of differentiation and have called for respecting the existing mandate.
India stated that trade for commercial purposes that impinges on policy space does not lead to development. It further contended that the present global trading system is highly inequitable and there was a need for a level-playing field.
The present round was for trade for development not for enhancing market access and outcomes should be fair and equitable, India stated.
China argued that it was important not to mix different kinds of domestic support- there is a difference between giving domestic support to big and rich farmers and support to poor farmers.
The issue of food stockpiling for food security purposes as well as the calculation of AMS has been a major area of contention between India, China and other developing countries and the developed countries, primarily the US.
India had caused much furore among developed nations last year when it blocked the Trade Facilitation Agreement—for cutting down red tape in global trade—so its food security programme will not be challenged under WTO rules.
An interim peace clause was finally brought in November 2014 which legally protected existing stock holding programmes of developing countries if purchases at government-set prices take the countries’ above the limits they have agreed for trade-distorting domestic support.
The member states have a deadline of obtaining a detailed work program for post Bali agenda by the end of July.