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IATP's Shefali Sharma is reporting from the 9th WTO Ministerial in Bali, Indonesia.

2 p.m., Bali, Indonesia

It is supposed to be the final hours of the 9th WTO Ministerial here in Bali but trade negotiators are milling in the hallways, conjecturing whether the meeting will be extended until tomorrow or wrap up by 5:00 p.m., whether there will be a “take it or leave it text” or further negotiations late into the night. There have been several contentious issues, including whether to finalize yet another trade agreement on trade facilitation and a non-committal package for the Least Developed Countries (LDC). However, the issue most critical to poor countries concerns food security. The current WTO framework on agriculture is being tested on its ability to accommodate government procurement for food security programs in developing countries.

India has been in the spotlight the last three days since the meeting began because it has stood firmly against the U.S. opposition to allow such programs from violating existing WTO rules. The existing rules were unfairly crafted in the mid-80s by the U.S. and the EU, but never mind that. The U.S. is insisting that India’s Food Security Act would exceed limits set in the agriculture agreement for “trade distorting” subsidies. Never mind too that the U.S. has negotiated space at the WTO to reconfigure its own domestic agriculture and food security programs.

Last night, the Indian Trade Minister Anand Sharma was holed up for hours with the Director General (DG) of the WTO Roberto Azevedo, the Indonesian Trade Minister Gita Wirjawan and USTR Michael Froman. The minister was asked several times to compromise on language on the public food stockholdings. Each time, it is rumored, Minister Sharma came back with a firm “no” because each proposal set onerous and unfair restrictions towards a permanent solution which India seeks. The “no” came from Prime Minister Manmohan Singh who has unanimous backing from his cabinet that India’s Food Security Act cannot be compromised. The last meeting between the DG and Ambassador Froman terminated at 5am this morning. The USTR has also refused to budge on this issue, essentially demanding that nothing should limit exports (hence profits) of U.S. agribusiness.

This morning has been a flurry of rumors about what will happen. Indonesia’s young trade minister is a possible presidential candidate and is eager to have a “package” at Bali; the irony is that Indonesia has abandoned its own proposal while its own Bulog program for rice procurement could in principle stand to be challenged under existing WTO rules if it was proven that Indonesia has not used “market prices” for its support. Indonesia chairs the G-33 which has tabled the proposal on exemptions from challenges to public food stockholding programs in developing countries. In Bali, Indonesia has done little to further the cause. The fact is that several developing countries around the world use food procurement programs for addressing hunger in their countries. Many, like Brazil, have simply manipulated the notifications of these programs to the WTO afraid of being challenged. Other countries in Africa, Latin America and Asia that could benefit from such programs in the future could be restricted from enacting such programs unless the WTO and the governments negotiating here wake up to the fact that trade is a small component of food security. Global trade turned out to be a highly unreliable way to ensure food security in 2007-08 when food grain prices sky-rocketed and food riots broke out in over 30 countries.  

Contrary to media reports, India has not fought this fight alone behind closed doors. Several countries including Nepal, Egypt, Kenya, Bolivia, Cuba, Venezuela, Uganda, Rwanda, South Africa and Namibia (to name a few) have either expressed support or made statements in support of a permanent solution to this problem at the WTO. For instance, one African country said in a closed meeting, “Food security and agriculture linkages need to be underpinned in this agreement. The food security proposals underpin the social and economic fabric of our and other African economies.”

As the crowd thins here for lunch, it is still unclear whether negotiations will continue on into the night/ Several rumors are circulating that a compromise may have been reached: one that allows the U.S. to claim that it placed restrictions on such programs through a “Peace Clause” with certain conditionalities and a time period that would prevent any challenges to such programs; and one that sets up a negotiating track for a permanent solution to allowing such food security programs to continue without challenges at the WTO. There was an earlier rumor that the U.S. would only accept a permanent solution if “no new food security programs” could be enacted that exceed subsidy limits currently prescribed at the WTO. 

If the WTO heeds this conditionality, it will only further reinforce the viewpoint that the WTO is incapable of handling the major challenges of the 21st century—the central ones being food security in the era of climate change and high and volatile food prices.

Stay tuned.

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