Subsidies for stock building in the focus of the WTO

A group of developing countries led by India wishes to receive from the World Trade Organization (WTO) the right to grant unlimited subsidies for sugar and other products for reasons related to food security. Food security is a concern that has grown with the pandemic and that threatens the interests of the agribusiness in Brazil and other exporters.

India will seek to legalize that demand at next week’s WTO ministerial conference in Geneva. But the move will be rejected by exporters, who consider that the release would mean a setback in the rules of global trade – going precisely in the opposite line of the liberalization expected for decades in this sector.

The issue will be one of the disputes at the conference and involves a permanent solution for the formation of public stocks capable of guaranteeing food security in developing countries. In 2013, at the ministerial conference in Bali, Indonesia, India reached an interim solution to the issue, and in return, it endorsed the consensus around the Agreement on Trade Facilitation.

By the agreement in Bali, a “peace clause” was introduced in the interim solution. Thus, India and some 20 other developing countries were guaranteed not to be questioned before WTO judges for granting distortive subsidies above the agreed limits, as long as the support was to build public food stocks for reasons of national security.

Now, India, the G33 – a group that includes countries like China, Indonesia, and Pakistan – and the African Group want a permanent solution whereby they could even adopt new programs with managed prices to build public stocks, with unlimited and unrestricted subsidies for a wide range of variety of commodities.

Source: Valor Econômico

To read the full original article, access the link: https://valor.globo.com/agronegocios/noticia/2021/11/25/subsidios-para-a-formacao-de-estoque-no-foco-da-omc.ghtml

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