news Thursday, January 29, 2015 - 05:30
Chitra Subramaniam| Geneva| The News Minute| July 27, 2014| 8.00 pm IST Whichever way the Trade Facilitation Agreement (TFA) goes next week, heavens are not going to come down. Despite the roar and thunder, India understands the importance of a responsible multilateral trading system that the World Trade organization (WTO) is and WTO deadlines are not cast in stone.  The precursor to the current Doha Round, the Uruguay Round which was the eighth round went on for seven years (1986 to 1994), twice the time originally planned. Many countries and trading blocs together and separately threatened to walk out together and separately at all and any time. At one point in Marakesh (Morocco) where that deal was struck, things looked so desperate that the then head of WTO Peter Sutherland said he would dance atop a table if he could get countries to agree. They did, bringing in the largest change the multilateral trading system has seen since the wars.  The Uruguay Round which ruled on everything from toothpaste to AIDS, signed by 123 countries (contracting parties) was a game changer as it led to the creation of the WTO, the third leg of the Breton Woods system (the World bank and the International Monetary Fund are the other two). The WTO was a single undertaking that allowed cross sector retaliation – more of that in another post.  Now as negotiators in Geneva burn the midnight oil and develop texts in state capitals, the blip over TFA which basically seeks to clip red tape in international trade has accidentally profiled the very real problem of mouths India has to feed on a daily basis through stockpiling and subsidies.  So how many people would that be? That depends on what you read or which briefing you attend. According to the World Bank there are 872.3 million people below the poverty line of which some 197 million live in India. So the Bank calculates that India with 17.5 percent of the world’s total population accounts for 20.6 percent of the world’s poorest.  But then, the reality check called the Food Security Bill (FSB) which attracted a lot of attention in the run up to Bali (where the TFA was agreed to) says up to 800 million people in India will be entitled to 5kgs of food every month at a fraction of the market value. Rice will be available for three rupees, wheat for two and millet for one and the entire programme would cost the government $20 billion every year and involve 61.1 million tonnes of food.  Interestingly enough, last time too there was a protracted fight over food subsidies, but that was between the United States (US) and the European Union (EU). Farmers on both sides of the Atlantic took to the streets burning each other’s products. Now the two trading blocs are together looking for newer markets.  There are 160 contracting parties today. Everybody accepts the importance of rule-based systems. At issue is a principle, a time-table which was promised and beyond that, the very real problem of extremely poor people in India who have nothing to eat. It’s about food, not cakes, stupid.

Show us some love! Support our journalism by becoming a TNM Member - Click here.