Development Demands in International Agricultural Trade Should Be Taken Seriously
Recently, the author noticed that due to the tough stance taken by India and other countries on the issue of agricultural subsidies, the only trade liberalization agreement reached since the founding of the World Trade Organization (WTO) stalled at the end of July. Some commentators believe that this move may deal a blow to the outside world's last remaining confidence in the multilateral trade framework, prompt major global trading nations to focus their attention further on regional free trade negotiations, and leave the already “dim” prospects of the WTO facing the awkward predicament of “existing in name only.” In the author's view, although the stalling of the agreement is disappointing, India's position of insisting that the matters decided at the Bali conference be advanced in parallel in order to ensure national food security and farmers' incomes is not without merit. The trade rules and dispute settlement mechanism formed by the WTO since the establishment of the General Agreement on Tariffs and Trade will still play a fundamental role in managing multilateral trade.
It is reported that in December 2013, the ninth WTO Ministerial Conference reached the first multilateral trade agreement since the founding of the WTO, namely the “Bali Package.” Under the terms of the agreement, WTO members needed to adopt the protocol of the agreement on the basis of consensus before July 31 of this year, formally incorporating the agreement into the WTO rule system. The agreement aims to simplify customs and port clearance procedures and improve the efficiency of cross-border trade, and is expected to reduce cross-border trade costs by about 10% to 15%. The International Chamber of Commerce (ICC) estimates that the package will add nearly 1 trillion US dollars in trade to the world economy and create 21 million jobs globally, of which 18 million will be in developing countries.
As a major developing country that would inevitably benefit from this, why did India take the lead in opposing it? According to reports, India took a tough stance in the negotiations on its own food reserves and food subsidies. India stated that unless a parallel agreement could be adopted to ensure that India enjoys more flexibility on food subsidies and reserves, it would not sign the “Bali Agreement.” This approach won the support of Cuba, Venezuela and Bolivia. With their differences unresolved, India vetoed the adoption of the trade facilitation agreement at the last moment.
The WTO Agreement on Agriculture explicitly states that trade liberalization reform must “take into account non-trade concerns, including the need for food security and environmental protection,” among other things. In advancing trade liberalization, full consideration must be given to food security, small farmers' livelihood security and rural development needs must not be sacrificed for commercial interests, and developing members must be given full special and differential treatment. These are the basic principles clearly established in the WTO and the Doha Round negotiations.
According to Ni Hongxing, director of the Agricultural Trade Promotion Center of the Ministry of Agriculture, who participated in the negotiations on the “Bali Package,” India insisted at the ministerial conference that the interim plan of the G33 food security proposal must be linked to a permanent plan. Under pressure from the possibility of the negotiations collapsing, India remained tough, stating that small farmers' livelihoods could not be sacrificed for commercial interests. Due to India's insistence, the United States ultimately showed flexibility and agreed to India's demands. India adhered to the principle that small farmers' livelihoods must not be harmed for commercial interests, and ultimately achieved its negotiating objectives.
Like India, China is a major agricultural country with a very large agricultural population, and support for agriculture is of even greater significance. After 15 years of arduous negotiations, China joined the World Trade Organization in 2001. Joining the WTO has already had, and will continue to have, a tremendous impact on China's economic and social development and people's lives. Because China's agriculture made major commitments during the WTO accession process, it has become one of the countries with the most open agricultural product markets in the world. Under the conditions of an open agricultural product market, China's agricultural development faces many challenges, and the existing space for agricultural policy regulation is very limited. Therefore, strengthening state support for agriculture and safeguarding the country's favorable position in international agricultural trade is not only crucial for ensuring the healthy development of Chinese agriculture under open conditions, but also very necessary for ensuring world food security.