New Delhi: A missing “or", and the ambiguity in interpretation it leads to, may have forced the National Democratic Alliance (NDA) government’s hand in delaying a deal on trade facilitation at the World Trade Organization (WTO).

The case of the missing interjection also raises questions on whether the previous United Progressive Alliance (UPA) government and its trade minister misled the country on the nature of the agreement reached in Bali last year.

After returning from Bali and claiming victory for India, the UPA’s trade minister Anand Sharma had said in a statement in the Rajya Sabha on 18 December that after intense negotiations, an agreement was reached that addressed India’s core concerns.

“It provides for an interim mechanism to be put in place and to negotiate for an agreement for a permanent solution for adoption by the 11th Ministerial Conference of the WTO. In the interim, until a permanent solution is found, members will be protected against challenges in the WTO under the Agreement on Agriculture in respect of public stockholding programmes for food security purposes. It unambiguously stated that the interim solution shall continue until a permanent solution is found. By implication, India will have the flexibility of providing support to its farmers without the apprehension of breaching its WTO entitlements."

It emerges that this “interim" relief was only till 2017 and not indefinite.

Trade minister Nirmala Sitharaman said the Bali agreement states that some permanent solution will be found by 2017 and that till then India will have the so-called peace clause. “If on a particular date in 2017, we didn’t have a permanent solution, we ran the risk of India being dragged for arbitration under WTO for every breach in our (food) subsidy schemes," she told Mint.

On Saturday, speaking at the Bharatiya Janata Party’s National Council meeting in New Delhi, Prime Minister Narendra Modi hit out at the UPA regime saying “those who sought votes in the name of food security, signed the agreement" at Bali sacrificing the interests of the poor. The agreement was meant to simplify customs procedures, facilitate the speedy release of goods from ports and cut transaction costs.

“There are attempts to spread doubts on WTO. Should we choose in favour of our farmers or for getting good international publicity in the media? We have chosen the former. We have chosen the interest of the poor people of the country," Modi said.

On 25 July, India informed other members in the general council that the deadline for adopting the Trade Facilitation Agreement (TFA) in WTO rulebook should be postponed to 31 December, by when members should find a permanent solution on the issue of public stockholding for food security.

At the heart of the problem is a WTO rule that caps subsidies to farmers in developing countries at 10% of the total value of agricultural production, based on 1986-88 prices. Developing countries complain that the base year is outdated and that they need to be given leeway to stock enough grains for the food security of millions of their poor.

On 30 July, India proposed that a small change be made in the Bali text, which would make the four-year interim solution that India got continue beyond that if no permanent solution could be found by 2017, something Sharma had claimed has already been agreed upon at Bali.

In the sentence “In the interim, until a permanent solution is found", in the Bali agreement, India wanted to replace the comma with an “or" which would make it “In the interim or until a permanent solution is found". This change, India believes, will allow it to breach the current WTO subsidy rules, which it considers unjust, indefinitely if developed countries refuse to amend the rules within four years.

Interestingly, Sharma, replying to the debate on his Bali statement in Rajya Sabha on 19 December claimed that the crucial sentence in the Bali agreement quoted above reads with the “or" and not with the comma, which is not the case.

“If they find a permanent solution which is a negotiated permanent solution, that is notified, it could be in four years. But we did not stop there. We insisted, and if you read beyond that, the very next sentences say, ‘or until a permanent solution is put in place’," Sharma said in his reply.

On 1 August, briefing reporters after India scuttled the trade facilitation agreement in the previous night at Geneva, a senior commerce ministry official said on condition of anonymity that India fought to introduce the word “or" in that particular sentence at Bali, but had to contend with the comma, leaving “creative ambiguity" on the fate of the deal after the initial four years.

When contacted, Sharma said: “The word ‘or’ could have been innocuously included in my statement. Whether it is an ‘or’ or a comma, meaning is the same. I reject any other interpretation. You go by what I have said in the Parliament, I am not going to reinterpret it for you."

Devinder Sharma, a food and trade policy analyst, said it was very clear that Anand Sharma did not goof up at Bali but knew exactly what he was doing. “Then prime minister Manmohan Singh must have told him that Bali must succeed. That is why India compromised the interests of its farmers," he added.

Biswajit Dhar, a professor in international trade at the Jawaharlal Nehru University, said if the member-countries failed to find a permanent solution on public stockholding by the 11th ministerial conference in 2017, there will not be any protection available for India. “The agreement says we will try to find a permanent solution by 2017. But it does not say what happens if it fails to find a permanent solution by that time," he added.

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