Thursday, July 31, 2014

Why India stands against the WTO

Among the wailings and gnashing of teeth coming out of Geneva at India’s refusal to ratify a trade agreement to improve customs procedures, is very little analysis, let along sympathy, for the country’s position.

We have heard a great deal about the fact that ratification of the so-called Trade Facilitation Agreement (TFA) would save World Trade Organisation (WTO) members $1 trillion over time (quite what time and to whom the greater benefits will flow is never made clear) and threats to shut India out of any future agreement.

The fact that India does buy grain at inflated prices from its farmers in order to stockpile it and provide it at reduced cost to poor families, is either passed over or treated as some form of unnecessary bureaucratic stumbling block to free trade.

The fact also that New Delhi has been trying for years to gain some form of exemption from WTO subsidy rules in order to continue this very necessary and wholly internal practice, also seems to have been forgotten.

It came to a head when the new Indian Government set out an ultimatum: Provide an exemption from our internal subsidy practice or we want nothing to do with the TFA.

This brought a chorus of disapproval from the Western-dominated WTO. United States Ambassador to the body, Michael Froman described India’s stance as “deeply disappointing”. Australia’s Minister for Trade, Andrew Robb, called it “a great blow to confidence in the WTO”.

The rich Western nations, that can easily feed their own populations and seek to sell their surpluses abroad, regard free trade as a sacred script – and indeed there are tremendous advantages.

But there also have to be exceptions to the rule.

India has one third of the world’s extreme poor living within its boundaries. Minister for Minority Affairs, Najma Heptulla has described it as the biggest challenge facing the nation over the next decade. “We are not proud of it and we will surmount it,” she said.

To do this it is absolutely necessary to support the nation’s farmers, many of whom are bordering on the extreme poor, in order to keep them producing the food essential for the day-to-day survival of millions.

Freer trade is a laudable objective, but India should not allow itself to be drawn into a system that would penalise it for providing sufficient food for the survival of its people.

There may well be a trillion dollars and millions of jobs resulting from a TFA down the track, but the extreme poor of India cannot wait for this golden age.

They need food for themselves and their children today, and tomorrow, and the day after.



No comments:

Post a Comment