WTO approves India-US agreement on food security,ias mains

The WTO adopted the Agreement that aims toease the movement of goods between member

countries; thereby reducing transaction costs 13Member countries are now free to accept the

Agreement.The General Council approved the peace clausethat will enable India to continue providing farm

subsidies indefinitely, and set a deadline tocomplete the Bali Package. Details of the events

that transpired over the last year are given below:

December 2013

The Trade Facilitation Agreement was to beadded to the WTO Agreement at the Ninth WTOMinisterial Conference. An interim solution onthe food grains stockholding issue was agreedupon at the conference. The WTO sets a limit onthe support that governments can provide tofarmers, at 10% of the total value of productionof food grains. Developing members, like India,with large populations that need to be ensuredfood security, would be protected from beingchallenged in WTO on grounds of exceeding the10% limit.

July 2014

At the WTO meeting, India did not support theadoption of the Protocol of Amendment for the

Agreement. It held that the adoption of theprotocol must be postponed until a permanentsolution on food security is reached, since theyare both part of the Bali decisions fromDecember 2013.14 The General Council couldnot find a solution and was declared closedwithout adopting the Agreement protocol.

November 2014

India and the US reached an agreement onsubsidies resulting from the public stockholding

of food grains on November 13, 2014.15 TheIndia-US agreement implied that the USsupported India's demand of being allowed togive subsidies to its farmers indefinitely, withoutbreaching WTO‟s limit.16

The peace clause can be used by India if it canmeet the following conditions:

 To ensure that the public stockholdingprogramme does not distort global trade andsimilar programmes by other countries.

 To notify the WTO if it has crossed or islikely to cross the limit on subsidies providedto farmers.

 New food stockholding programmes that maybe launched in the future will have to abide

by the 10% limit set by the WTO.

The peace clause was approved by the WTO