INDIA%20AND%20THE%20WTO%20IN%20THE%20CONTEXT%20OF%20AGRICULTURE - PowerPoint PPT Presentation

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INDIA%20AND%20THE%20WTO%20IN%20THE%20CONTEXT%20OF%20AGRICULTURE

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Title: INDIA%20AND%20THE%20WTO%20IN%20THE%20CONTEXT%20OF%20AGRICULTURE


1
INDIA AND THE WTO IN THE CONTEXT OFAGRICULTURE
2
HOW IS WTO DIFFERENT FROM GATT?
3
WTO IS GATT PLUS
  • WTO covers areas well beyond GATT
  • Textile and Agriculture
  • Intellectual Property Rights
  • Services
  • Investment

4
BASIC PRINCIPLES OF WTO
  • Protection to domestic industry through tariffs.
  • Binding of tariffs.
  • Most Favoured Nation (MFN) Treatment.
  • National Treatment

5
WORD TRADE ORGANISATION
  • How to make the best of it?

6
WORLD TRADE ORGANISATION
  • Was there any option available?

7
JOINING WTO. EVEN IF THERE WAS AN OPTION
AVAILABLE
  • With regard to Agreements in General and
    Agreement on Textiles and TRIPS in particular
  • With regard to Agreements on Agriculture

8
MISAPPREHENSIONS ABOUT WTO
  • Potential benefits of Agreement on Agriculture
  • Removal of Quantitative Restrictions.

9
UNDERSTANDINGAGREEMENT ON AGRICULTURE(AOA)
10
AGREEMENT ON AGRICULTURE (AOA)
  • AOA and the Agreement on Application on Sanitary
    Phytosanitary Measures were negotiated in
    parallel
  • Decisions on measures concerning the possible
    negative effects of the reform programme on least
    developed and net food importing developing
    countries also part of the package.

11
THREE MAIN ELEMENTS OF THE AGREEMENT
  • Market Access
  • Domestic Subsidies
  • Export Subsidies
  • In addition, special concerns of developing
    countries and net food importing countries are
    also addressed.

12
MARKET ACCESS
  • Tariffication of Non Tariff Barriers (NTBs)
  • Reduction of Tariffs
  • By a simple average of 36 over 6 years for
    developed countries
  • By a simple average of 24 over 10 years for
    developing countries
  • Minimum Access
  • Not less than 3, rising to 5 by 2004 for
    developing countries
  • Not less than 3, rising to 5 by 2004 for
    developing countries

13
DOMESTIC SUPPORT
  • Aggregate Measurement of Support (AMS)
  • Product Specific
  • Non-Product Specific
  • De Minimis Provisions
  • Three Categories of Domestic Support
  • Green Box Measures
  • Blue Box Measures
  • Amber Box Measures

14
DOMESTIC SUPPORT
  • Green Box measures include all publically funded
    government programmes which do not provide price
    support to producers. For example, research, pest
    and disease control, marketing and promotion
    services, infrastructure, public stock holding,
    payments under environment programmes etc. These
    measures are considered least trade distorting
    and hence are exempt from reduction.

15
DOMESTIC SUPPORT
  • Blue Box measures refer to direct payments under
    production limiting programmes, which are also
    not subject to reduction commitments.
  • Amber Box measures include product specific
    support as well as non-product specific support
    extended to the farm sector. These are subject
    to reduction above the de minimis level.

16
DOMESTIC SUPPORT
  • Other exemptions include
  • Investment subsidies in the Agriculture sector
  • Input support to low income/resource poor farmers
  • Support for diversification from illicit narcotic
    crops

17
EXPORT SUBSIDY
  • Prohibited
  • Otherwise subject to reduction commitments
  • Value of Subsidy
  • By 36 over 6 years for developed countries
  • By 24 over 10 years for developing countries
  • No reduction for least developed countries
  • Quantity of Export
  • By 21 over 6 years for developed countries
  • by 14 over 10 years for developing countries
  • No reduction for least developed countries

18
NOTIFICATION OBLIGATIONS
  • Members bound to notify changes in Market Access,
    Export Subsidies and Domestic Support
  • India notifies
  • AMS
  • Product Specific for 19 crops
  • Non product specific Fertilizer, Irrigation
    Electricity and seeds
  • Green Box
  • Special differential , provisions for low
    income/ resource poor farmers

19
INDIAS COMMITMENTS
  • Market Access
  • No tariffication ceiling bindings of
  • 100 for primary commodities
  • 150 for processed agricultural products
  • 300 for edible oils
  • Cont----/----

20
INDIAS COMMITMENT
  • Domestic Support
  • Price Support for 19 products
  • AMS is negative by a large margin and below De
    Minimis
  • Export subsidy
  • India does not have these.
  • No commitments

21
WHAT HAS HAPPENED SO FAR?
22
GROWTH OF AGRICULTURAL EXPORTS IN POST-WTO
PERIOD
Value of Agri Exports 1994-1995 2000-2001 Percentage Change
In Rs. Crores 13712.00 28909.50 110.83
In Rs. Crores at 1993-94 prices 121.88 185.67 52.33
In Million Dollars 4227.30 6012.56 42.23
23
TRENDS IN AGRICULTURAL TRADE OVER THE LAST TWO
DECADES
VALUE IN US MILLION
Sl.No. Item 1980-81 1990-91 2000-01
1. Total exports 8486 18143 (113.80) 44400 (144.72)
2. Total Agricultural Exports 2601 3521 (35.37) 6013 (70.77)
3. share of Agri Exports to Total Exports 30.65 19.40 (-36.70) 13.54 (-30.20)
4. Total imports 15869 24075 (51.7) 49720 (106.52
5. Total Agricultural Imports 2030 1354 (-33.26) 1676 (23.78)
6. share of Agri Imports to Total Imports 12.80 5.62 (-56.1) 3.37 (-40.03)
7. Value of Agri Imports as 78.04 38.45 (-50.73) 27.88 (-27.50)
Figures in parentheses indicate percentage over
the previous decade
24
CHANGES IN UNIT EXPORT PRICES (DOLLAR PER KG)
Sl.No. Commodity 1994-1995 2000-2001
1. Fresh Fruits 0.13 0.60
2. Processed Fruits and Vegetables 0.54 0.64
3. Poultry and Dairy Products 0.42 1.73
4. Tea 2.05 2.13
5. Spices 1.26 1.45
6. Other Cereals 0.10 0.19
7. Non-Basmati Rice 0.24 0.25
8. Meat and Meat Preparations 1.01 1.07
9. Groundnut 0.63 0.50
10. Coffee 2.61 1.36
11. Basmati Rice 0.62 0.55
12. Wheat 0.15 0.12
13. Marine Products 3.51 2.75
14. Fresh Vegetables 0.89 0.20
15. Fruits and Vegetable seeds 1.16 1.09
Source CMIE Reports
25
WTO DOMESTIC SUPPORTNOTIFICATIONS ( BILLION)
Country and Category Base 1995 1996 1997 1998
European Union 116 117 119 99 96
- Amber 102 62 61 56 52
- Blue - 28 28 22 22
-Green 14 27 30 21 22
Japan 74 68 60 56 34
- Amber 53 38 36 30 6
- Blue - - - - -
- Green 21 30 24 26 28
United States 56 62 60 58 64
-Amber 27 6 5 5 10
-Blue - 5 - - -
- Green 29 51 55 53 54
Source WTO Notifications
26
ESTIMATES OF SUPPORT TO AGRICULTURE IN OECD
(FIGURES IN US DOLLARS BILLION)
Item 1986-88 1997-99 1997 1998 1999
Producer Support Estimate (PSE) 246 267 246 271 283
Total Support Estimate (TSE) 308 347 329 352 361
Source OECD data base
27
PERCENTAGE AGGREGATE MEASURE OF SUPPORT BY MAJOR
COUNTRIES
Country as of value agricultural Year of Production Domestic Support
EU 1997 48.03
Japan 1998 39.15
USA 1997-98 28.59
Canada 1997 10.60
28
INDIAS AGGREGATE MEASUREMENT OF SUPPORT (RS.
CRORES)
Item 1986-89 1995-96 1996-97 1997-98
Product Specific -26491.70 -29619.00 -30550.50 -28245.83
Non Product Specific 4581.40 5772.06 780.35 882.44
of Value of Agricultural Production 5.40 7.52 1.83 2.07
Note - does not exclude support to resource
poor farmers - indicated only for
non-product specific support Source Ministry of
Commerce, Government of India
29
MAJOR COUNTRY POSITIONS
  • EU, Japan and certain Nordic countries advocating
    multifunctionality in an attempt to continue with
    the high degree of protection currently available
    to their agriculture.
  • Cairns Group of agriculture exporting countries
    (18) calling for substantial reduction in
    tariffs, domestic support and elimination of
    export subsidies.

30
MAJOR COUNTRY POSITIONS
  • United States looking for greater market access
    for its products, championing trade in
    genetically modified products, calling for
    reduction in tariffs and trade distorting
    support.
  • Developing countries having a difference of
    opinion keeping in view their status as net
    importers of food or exporters of agricultural
    products

31
SD PROVISIONS
  • Ostensibly designed to create a level playing
    filed between developed and developing countries
  • AOA provides SD treatment favouring the
    developed countries, i.e. the continuance of Blue
    Box, export subsidies, unlimited Green Box and
    domestic support levels and TRQs

32
INDIAS OBJECTIVES
  • To preserve flexibility in domestic support
    policies to ensure food and livelihood security.
  • To create opportunities for a meaningful
    expansion of agricultural exports.

33
PROPOSALS
  • As a SD measure, developing countries to be
    allowed to maintain appropriate levels of
    tariffs
  • Developing countries to retain flexibility for
    public stock holding and public distribution of
    food grains
  • Use of special safeguard in the event of a surge
    in imports or a decline in prices
  • Measures for poverty alleviation, rural
    development and employment to be exempt from AMS.
  • Cont.

34
PROPOSALS
  • Primary agricultural commodities like jute,
    rubber, coir and primary forest produce which
    provide employment and livelihood to many to be
    covered by AOA.
  • Exemption to developing countries from any
    obligations to provide minimum market access.
  • Historical low tariff bindings to be rationalised
    commensurate with bindings on similar category of
    products under the Uruguay Round.
  • Negative product specific support to be allowed
    to be adjusted against positive non-product
    specific support.
  • Cont.

35
PROPOSALS
  • To achieve meaningful market access it is
    proposed to seek
  • Substantial reduction in tariffs, tariff peaks
    and tariff escalation by developed countries
  • Eventual abolition of TRQs
  • Transparent administration of TRQs with
    preference to developing countries in the
    interregnum
  • Cont.

36
PROPOSALS
  • Suitable accounting of all trade distorting
    support (e.g. paras 5,6,7 of Annex 2 and Art.
    6.5 of AOA) in the AMS calculations
  • Elimination of all forms of export subsidies
    including export credits, guarantees, insurance
    etc. by developed countries.
  • Flexibility available to developing countries
    under ASCM to be preserved in AOA
  • Cont.

37
PROPOSALS
  • Peace clause not to be extended for developed
    countries
  • Down payment by way of 50 reduction in trade
    distortion and tariffs by developed countries by
    the end of 2001
  • Retaining and strengthening the existing SD
    provisions

38
WHAT HAPPENED AT DOHA?
39
AT DOHA
  • Implementation related concerns
  • Agreed to negotiate on outstanding implementation
    issues which shall be an integral part of the
    work programme

40
AT DOHA
  • Agriculture
  • Agreed to a comprehensive negotiation for
    substantial improvement in market access, phasing
    out of export subsidies and reducing domestic
    support.

41
AT DOHA
  • Market access for non agricultural products
  • Agreed to negotiate for reduction of tariffs,
    including peak tariffs and removal of non-tariff
    barriers

42
AT DOHA
  • TRIPS
  • Agreed to consider extension of the protection of
    geographical indications provided for in Article
    23.
  • Waiver from TRIPs for cheap medicines overriding
    patents in times of public health emergencies

43
AT DOHA
  • Trade Investment/Trade competition/Governmen
    t procurement/Trade facilitation
  • Negotiation to take place but through explicit
    consensus

44
AT DOHA
  • Trade Environment
  • Agreed to negotiate on the relationship between
    existing WTO rules and specific trade obligations
    set out in multilateral environment agreements.

45
FUTURE STRATEGY FOR DEVELOPING COUNTRIES WITH
REGARD TO AGRICULTURE
46
FUTURE STRATEGY
  • Ensure reduction of AMS and duties in letter
    and spirit . The implementation issues

47
FUTURE STRATEGY
  • Forge a common platform to change the rules of
    the game special and differential treatment,
    AMS, reduction of duties.

48
FUTURE STRATEGY
  • Proactive preparations for penetrating the
    markets when the duties and the subsidies come
    down.
  • Are we prepared?

49
FUTURE STRATEGY
  • Active participation in Codex meetings.
  • Forging common platform for SPS related barriers.

50
FUTURE STRATEGY
  • Emphasis on quality within the country the
    Quality culture has to be developed

51
FUTURE STRATEGY
  • Identify subsidies which are WTO
    compatible
  • Agri Export Zones are a move
  • in this direction.

52
FUTURE STRATEGY
  • Take a fresh look at agricultural commodities
    which are being supported and move towards such
    commodities which are market driven rather than
    State driven
  • Wheat Durum Wheat
  • Rice Basmati Rice
  • Sugar Potatoes
  • Onion
  • Eggs

53
Thank You
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