Bali meeting: India in the spotlight

Day two of the World Trade Organization's ninth ministerial conference started with a bang. After nearly a dozen countries including the United States and European Union and G-33 members such as Mexico and China spoke about compromise and flexibility to take through the Bali package and restore the credibility of the global trade body, India literally made everyone at the plenary session sit up and take notice.

Commerce minister Anand Sharma minced no words when he said India would not compromise on food security. Not only did India harden its stance on agriculture subsidies and food security but also said it would not support the trade facilitation agreement in its key forms. Both these proposals are crucial aspects of the Bali package. Little wonder then, that India's stance was the talking point for the day and even EU trade commissioner Karel De Gucht later in the day hoped India would pave the way for a conclusion of the talks.

The three-hour long informal meeting of member nations with the WTO Director General Roberto Azevedo in the afternoon to thrash out an accord also did not see India back down from this position. India faces problems because it is not the food subsidy being questioned but the price at which it is being run. Prices of agro commodities have risen drastically since 1994 the date of the last WTO accord on agriculture as India, meanwhile, has doled out huge rise in minimum support prices. A lower price level would have kept Sharma nicely within the 10 per cent WTO mandated cap on cost of subsidies despite rolling out the ambitious Food Security Act. If the talks fail, India risks being dragged to the WTO dispute settlement body every time it breaches the cap. According to officials, the subsidy for rice and wheat are almost there.

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