TL;DR:
- Global trade ministers are in a deadlock over nearly $1 trillion in agricultural subsidies, with significant discussions at the WTO meeting in Abu Dhabi.
- India seeks a permanent pass for its subsidies to support food reserves, facing opposition for potentially distorting global markets.
- The consolidation of proposals into a single negotiating text marks progress, yet substantial disagreements remain, particularly over India’s request.
At the halfway point of the World Trade Organisation’s (WTO) biennial meeting in Abu Dhabi, attended by 164 global trade ministers, the atmosphere is tense with discussions on addressing the nearly one trillion dollars in trade-distorting agricultural subsidies. New Zealand’s Trade Minister, Todd McClay, represents the country, highlighting the international stakes involved.
WTO Director-General Ngozi Okonjo-Iweala has made a significant stride by merging competing proposals into a single negotiating text, aiming to resolve longstanding issues of subsidies and tariffs affecting global agricultural trade. Despite this progress, Edwini Kessie, the head of the WTO’s agricultural division, acknowledges the persistence of significant hurdles, particularly India’s controversial request for a permanent exemption for its agricultural subsidies.
This exemption, initially temporary in 2013, was intended to bolster India’s food reserves for shortage periods. Critics argue that this has led to overproduction and the depression of global commodity prices, notably rice.
The debate intensifies with Stephen Jacobi, the executive director of the International Business Forum (IBF), warning that granting India a permanent pass could undermine the WTO’s ban on export subsidies and encourage protectionist measures worldwide. This concern is echoed by the Dairy Companies Association of NZ, which notes that halving European agricultural subsidies could boost international dairy market prices by 8%.
On the other side, Abhijit Das, a former head of the Centre for WTO Studies in New Delhi and attendee of the Abu Dhabi talks, defends the necessity of subsidies for Indian farmers’ livelihoods and the broader population’s welfare. He credits the temporary subsidy dispensation with producing sufficient rice and wheat to feed 800 million people during the Covid pandemic’s peak, arguing against the notion that Indian subsidies harm global export markets.
The United States and the Cairns Group, a coalition of 19 agricultural exporting nations including New Zealand, stand against India’s proposal, dimming hopes for a comprehensive agreement. Despite the consolidation of proposals, significant disagreements remain, as indicated by unresolved issues in the negotiating text.
Stephen Jacobi suggests that the most feasible outcome of the Abu Dhabi meeting might be an agreement to continue discussions, to bridge differences by the next WTO ministerial meeting. This ongoing dialogue is crucial for New Zealand and other nations reliant on fair and open international agricultural markets.
