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India Leads Efforts To Negotiate ‘Peace Clause’ In WTO Agriculture Agreement

“India and some other developing nations are trying to negotiate a cease-fire in a heated battle over food subsidies for the poor that is threatening to derail global trade talks, officials involved in the talks said,” the Wall Street Journal reports (Mukherji/Dalton, 11/24). “The G33 nations, a group of emerging countries including India, are demanding amendment in the WTO’s Agreement on Agriculture (AoA) in order to implement the [country's] food security plan without attracting any penalty even after breaching the minimum subsidy cap,” the Economic Times writes, noting that under current WTO regulations, “a developing nation can provide food subsidy of up to 10 percent of the total farm output.”

According to the Economic Times, “India is likely to agree for a four-year ‘peace clause,’ which will provide immunity against penalty for breaching the food subsidy cap” (11/23). “The U.S. and some other WTO members have argued that India’s program and others like it could lead to an artificial lowering of food prices on world markets, especially if India exported subsidized rice and wheat,” the Wall Street Journal writes, adding, “The standoff has threatened to stymie progress in broader talks set for next month in Bali aimed at reviving long-moribund multilateral trade negotiations” (11/24). On Friday, Ertharin Cousin, executive director of the U.N. World Food Programme, “wrapped up a two-day visit to India by lauding the government for [its Food Security Act] that has made the right to food legally enforceable in a country that is home to about a quarter of the world’s undernourished,” the U.N. News Centre writes (11/22).