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INDIA AND THE WTO IN THE CONTEXT OF AGRICULTURE. HOW IS WTO DIFFERENT FROM GATT?. WTO IS GATT PLUS. WTO covers areas well beyond GATT Textile and Agriculture Intellectual Property Rights Services Investment. BASIC PRINCIPLES OF WTO. - PowerPoint PPT Presentation
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INDIA AND THE WTO IN THE CONTEXT OF
AGRICULTURE
HOW IS WTO DIFFERENT FROM
GATT?
WTO IS GATT PLUS
WTO covers areas well beyond GATT
Textile and Agriculture Intellectual Property Rights Services Investment
BASIC PRINCIPLES OF
WTOProtection to domestic industry through tariffs.Binding of tariffs.Most Favoured Nation (MFN) Treatment.National Treatment
WORD TRADE ORGANISATION
How to make the best of it?
WORLD TRADE ORGANISATION
Was there any option available?
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
MISAPPREHENSIONS ABOUT WTO
Potential benefits of
Agreement on
Agriculture
Removal of Quantitative
Restrictions.
UNDERSTANDINGAGREEMENT ON AGRICULTURE
(AOA)
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.
THREE MAIN ELEMENTS OF THE
AGREEMENT
Market AccessDomestic SubsidiesExport Subsidies
In addition, special concerns of developing countries and net food importing countries are also addressed.
MARKET ACCESSTariffication of Non Tariff Barriers (NTB’s)Reduction of Tariffs
By a simple average of 36% over 6 years for developed countriesBy a simple average of 24% over 10 years for developing countries
Minimum AccessNot less than 3%, rising to 5% by 2004 for developing countries Not less than 3%, rising to 5% by 2004 for developing countries
DOMESTIC SUPPORT
Aggregate Measurement of Support (AMS)
Product SpecificNon-Product Specific
De Minimis Provisions
Three Categories of Domestic Support“Green Box” Measures“Blue Box” Measures“Amber Box” Measures
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.
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.
DOMESTIC SUPPORT
Other exemptions include:
Investment subsidies in the Agriculture sectorInput support to low income/resource poor farmersSupport for diversification from illicit narcotic crops
EXPORT SUBSIDYProhibitedOtherwise subject to reduction commitments
Value of Subsidy
By 36% over 6 years for developed countries By 24% over 10 years for developing countriesNo 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
NOTIFICATION OBLIGATIONS
Members bound to notify changes in Market Access, Export Subsidies and Domestic SupportIndia notifies
AMS Product Specific for 19 crops Non product specific: Fertilizer, Irrigation
Electricity and seeds
Green BoxSpecial & differential , provisions for low income/ resource poor farmers
INDIA’S COMMITMENTS
Market AccessNo tariffication; ceiling bindings of
100% for primary commodities 150% for processed agricultural products 300% for edible oils
Cont----/----
INDIA’S COMMITMENT
Domestic Support
Price Support for 19 productsAMS is negative by a large margin and below De Minimis
Export subsidy
India does not have these.No commitments
WHAT HAS HAPPENED SO FAR?
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
GROWTH OF AGRICULTURAL
EXPORTS IN POST-WTO PERIOD
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)
TRENDS IN AGRICULTURAL TRADE OVER THE LAST TWO
DECADESVALUE IN US $ MILLION
* Figures in parentheses indicate percentage over the previous decade
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 1.09Source: CMIE Reports
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
WTO DOMESTIC SUPPORTNOTIFICATIONS ($ BILLION)
Source: WTO Notifications
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
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
INDIA’S 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
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.
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
S&D PROVISIONS
Ostensibly designed to create a level playing filed between developed and developing countriesAOA provides S&D treatment favouring the developed countries, i.e. the continuance of Blue Box, export subsidies, unlimited Green Box and domestic support levels and TRQs
INDIA’S OBJECTIVES
To preserve flexibility in domestic support policies to ensure food and livelihood security.To create opportunities for a meaningful expansion of agricultural exports.
PROPOSALSAs a S&D 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 grainsUse of special safeguard in the event of a surge in imports or a decline in pricesMeasures for poverty alleviation, rural development and employment to be exempt from AMS.
Cont…….
PROPOSALSPrimary 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…….
PROPOSALS
To achieve meaningful market access it is proposed to seek:
Substantial reduction in tariffs, tariff peaks and tariff escalation by developed countriesEventual abolition of TRQsTransparent administration of TRQs with preference to developing countries in the interregnum
Cont…….
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 calculationsElimination 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…….
PROPOSALS
Peace clause not to be extended for developed countriesDown payment by way of 50% reduction in trade distortion and tariffs by developed countries by the end of 2001Retaining and strengthening the existing S&D provisions
WHAT HAPPENED AT DOHA?
AT DOHA
Implementation related concerns
Agreed to negotiate on outstanding implementation issues which shall be an integral part of the work programme
AT DOHA
AgricultureAgreed to a comprehensive negotiation for substantial improvement in market access, phasing out of export subsidies and reducing domestic support.
AT DOHA
Market access for non agricultural products
Agreed to negotiate for reduction of tariffs, including peak tariffs and removal of non-tariff barriers
AT DOHA
TRIPSAgreed 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
AT DOHA
Trade & Investment/Trade & competition/Government procurement/Trade facilitation
Negotiation to take place but through explicit consensus
AT DOHA
Trade & EnvironmentAgreed to negotiate on the relationship between existing WTO rules and specific trade obligations set out in multilateral environment agreements.
FUTURE STRATEGY FOR DEVELOPING
COUNTRIES WITH REGARD TO
AGRICULTURE
FUTURE STRATEGY
Ensure reduction of AMS and duties in letter and spirit ………. The implementation issues
FUTURE STRATEGY
Forge a common platform to change the rules of the game: special and differential treatment, AMS, reduction of duties.
FUTURE STRATEGY
Proactive preparations for penetrating the markets when the duties and the subsidies come down.
Are we prepared?
FUTURE STRATEGY
Active participation in Codex
meetings.
Forging common platform for SPS
related barriers.
FUTURE STRATEGY
Emphasis on quality within the country……… the “Quality” culture has to be developed
FUTURE STRATEGY
Identify subsidies which are WTO
compatible…………………
Agri Export Zones are a move
in this direction.
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 RiceSugar Potatoes
OnionEggs
Thank You