India, US reach agreement on food security to end WTO impasse

New Delhi/Washington: India on Thursday achieved a major victory with the US agreeing to its proposal on food security issues at WTO, a development that will pave the way for a breakthrough to end the three-month long stalemate.

The agreement comes two days ahead of the G-20 Summit in Australia, which will be attended by Prime Minister Narendra Modi and other world leaders including the US President Barack Obama. The two-day meet begins on Saturday in Brisbane and WTO related matters are likely to come up during discussion between world leaders.

As per the agreement, the US will support India's proposal at WTO that 'peace clause', crucial for uninterrupted implementation of India's food security programme, should continue indefinitely till a permanent solution is found.

This will enable India to continue procurement and stocking of foodgrain for distribution to poor under its food security programme without attracting any kind of action from WTO members even if it breaches the 10 per cent subsidy cap as prescribed by the multilateral trade body.

As per the Bali agreement, the peace clause was to continue till 2017.

The differences on the public stock holding of foodgrains between the developed countries led by the US and developing nations including India led to impasse over ratification of the trade facilitation agreement (TFA) at Geneva in July.

The agreement between the US and India, according to WTO Director General Roberto Azevedo, will provide a basis to intensify consultations with other WTO members to overcome the present stalemate and to promptly implement all Bali ministerial decisions.

Briefing reporters, Commerce Minister Nirmala Sitharaman said, "India and the US have successfully resolved their differences relating to the issue of public stock holding for food security purposes in the WTO in a manner that addresses our concerns. This will end the impasse at the WTO and also open the way for implementation of the TFA".

On the development, the USTR said that both India and US have reached an understanding on implementation of Bali decisions.

"The bilateral agreement makes it clear that a mechanism under which WTO Members will not challenge such food security programmes under WTO dispute settlement procedures will remain in place until a permanent solution regarding this issue has been agreed and adopted," the USTR said.