Geneva: Millions of poor farmers and fishermen in India could lose the benefits of special programmes offered by the government on account of a sustained assault on farm and fisheries subsidies by the US.

Washington has declared special and differential treatment (S&DT) a “threshold" issue, implying that all developing countries will not be treated on a par with regard to farm and fisheries subsidy programmes.

The US stand amounts to introducing “differentiation" among developing countries.

Except two categories—small and vulnerable economies (SVEs) and least-developed or poorest nations—that are exempted from subsidy reduction commitments, other developing countries ought to be treated according to their current status in the global trading system, the US has suggested.

What this means is that Washington wants China and India to be treated separate from other developing countries—regardless of their hundreds of millions of poor farmers and fishermen—with regard to commitments on farm and fisheries subsidies in the Doha Development Agenda (DDA) trade negotiations.

The US’ position on farm and fisheries subsidies could severely affect special governmental assistance programmes for hundreds of millions of poor farmers and around 15 million poor fishermen in India.

India, on its part, maintained that it will not accept any measure aimed at slashing its entitlement to assist poor farmers and fishermen, said a person familiar with the development who asked not to be named.

During closed-door meetings of select trade envoys over the past five days, the US has suggested that the two large developing countries undertake subsidy reduction commitments in both farming and fishing for concluding DDA negotiations by the end of the year.

While subsidies for farmers come under the domestic support pillar in the Doha agriculture negotiations, those for fishermen are dealt with under the Doha rules negotiations, which also includes anti-dumping, subsidies, countervailing measures and regional trade agreements.

For the US, curbing subsidies to fisheries is a priority area in the Doha rules negotiations due to large-scale depletion of fish resources in the high seas.

On 11 June, World Trade Organization (WTO) director-general Roberto Azevedo discussed with trade envoys from the US, the European Union (EU), China, India, Brazil, Australia and Japan ways to construct a common concept for reducing trade-distorting farm subsidies without regard to S&DT flexibilities for developing countries, said people familiar with the meeting.

On Friday, Azevedo held a separate meeting with select trade envoys in a larger configuration on how to build discipline in fisheries subsidies, an area in which the US, along with a group of countries called Friends of Fish, are mounting a sustained effort to eliminate subsidies.

The common thread in these two separate meetings is how to reduce current entitlements in different subsidy programmes for agriculture and fishing, respectively, so as to conclude the Doha trade negotiations.

As regards farm subsidies, both China and India provide only de minimis (negligible) support. China provides 8.5% while India provides 10% for product-specific and non-product specific support under de minimis. The two countries are also exempted from reducing their de minimis support under the existing Doha negotiating mandates, particularly the 2005 Hong Kong Ministerial Declaration.

In contrast, the rich countries provide support under the most trade-distorting amber box measures, the de minimis support and the blue box of minimal trade-distorting support programmes.

The US, the EU, Japan, Switzerland and Norway also provide a large quantum of funds under what is called the green box subsidies, which are currently exempted from reduction commitments. But several studies have pointed out that even the green box subsidies provided by the rich countries are trade-distorting and need to be reined in.

At a time when major industrialized countries like the US provide over $53,000 on a per-capita basis to their farmers, India offers around $200 for every person active in agriculture.

During the meeting, the two developing countries refused to accept the common concept suggested by the WTO director general with which the industrialized countries are comfortable. China and India maintained that they will not accept a common concept which is avowedly aimed at slashing their entitlements, said the person cited above.

During the closed-door meeting on fisheries subsidies on Friday, the US crossed swords with China on allowing S&DT flexibilities, according to a South American trade envoy present at the meeting.

Washington also said the S&DT is a “threshold" issue, implying that all developing countries will not be treated on an equal footing.

In response, India maintained that it has some 15 million small fishermen who depend on fishing in coastal waters for their livelihoold and food security. India also made it clear that any attempt to change the S&DT architecture must be first approved by trade ministers before discussing fisheries subsidies.

China protested vehemently at the unilateral stand of the US, saying its resource-poor fishermen will need S&DT flexibilities.

Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter.

Share Via