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WASHINGTON: The United States and India signed an agreement on Thursday, which discourages governments from stockpiling food and selling it at subsidised rates.
“This breakthrough will strengthen the multilateral trading system and give a boost to its ongoing work, including in the area of food security,” said White House Press Secretary Josh Earnest.
In a statement issued by his office in Washington, Mr Earnest said the deal would also unlock progress towards the full and immediate implementation of the World Trade Organisation’s trade facilitation agreement.
The agreement, reached in Bali, Indonesia, in December 2013, calls for expediting the movement, release and clearance of goods, including goods in transit.
It will enter into force once two-thirds of WTO members complete their domestic ratification process.
The agreement between the US and India focuses on certain practices common in developing countries. In India, the government buys food, including grain, from its farmers and stockpiles it for a public distribution system.
It is later sold at government-run stores at subsidised prices to millions of citizens who cannot buy food at market rates.
This food subsidy programme is available to 75pc of India’s rural population and 50pc of the urban population.
WTO discourages this practice, arguing that subsidising more than 10pc of the grain produced in a country distorts the market for trade. India, however, has been reluctant to accept the 10pc cap.
India’s Commerce Minister Nirmala Sitharaman told a news conference in New Delhi that India has sent alternative proposals to WTO and the organisation’s General Council would review India’s proposals in its next meeting.
Neither India nor the US explained these proposals. They also refused to disclose the details of the agreement they signed on Thursday.
The White House press secretary said that President Obama and Prime Minister Narendra Modi had discussed the issue during Mr Modi’s visit to Washington in September.
The president “appreciates Mr Modi’s personal leadership in finding a path forward,” Mr Earnest said.
In July, India had threatened to veto the WTO trade facilitation agreements unless the dispute over its food security programme was resolved.
Published in Dawn, November 14th, 2014
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Comments (54) Closed
Nov 14, 2014 07:45am
good for the farmers.
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Nov 14, 2014 07:58am
World is moving forward......how about you Pakistan?
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Nov 14, 2014 08:44am
How can any other country tell what to stock or what not to? Because they fear that such good practices would hurt their exports.
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Nov 14, 2014 09:08am
Our pm's policy works
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Nov 14, 2014 09:13am
'discourages'...do it if you have to, but remember I am discouraging you.
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Nov 14, 2014 09:15am
Indian civilisation describes Dharma as the natural universal laws whose observance enables humans to be contented and happy, and to save themselves from degradation and suffering. Indian culture proves Dharma to be the very foundation of life. In the Mahabharata , Lord Krishna states that Dharma is the cosmic order and , and sustains society, maintains social order, and ensures the welfare of the society.
Capitalism , like all man made social orders such as communism and socialism , functions against the welfare of the society.
As per the concept of Dharma, Indian culture considers Food, Education, and Medicine as non profit making social services.
The New World Order head quartered in the U.S..A. considers Food, Education, and Medicine to be profit making industry.
A slave nation like India cannot resist the policies of the all powerful New World Order.
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Nov 14, 2014 09:22am
In the end India had to end its meek resistance and succumb to US dictate. Reality came calling.
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Nov 14, 2014 09:27am
Just a few weeks back when India had refused to sign such a deal, our Indian friends were coming here and posting how the Indian govt was doing the right thing by taking a stand for its poor people and praising Mr Modi's govt to the sky. I wonder now what those same commentators will have to say? FTR I do believe that the previous stance was better for the poor of India and this current agreement leaves the underprivileged to the whims of market forces.
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Nov 14, 2014 09:28am
This allegedly extremist, right-wing Modi seems to be a staunch nationalist taking India forward along with the rest of the world. Compared to the monotheists in the western world or the middle-east the right-wing in Hinduism or the specially coined Hindi term "Hindutva-wadis" looks to be far more liberal in terms of secular implementation of laws. We will see the after-effects in 5-10 years of the BJP policies and the total decimation of the Congress and its vote-bank policies.
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Nov 14, 2014 09:31am
@Zak - Thank you Zak, for pointing out the reality of a 1.5 trillion dollar economy. Now run along and join the anti-drone protest.
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Nov 14, 2014 09:42am
@Zak
Let the details come out in public then will see what has happened and who has succumbed.
But whom am I telling this? citizen of a nation who under US pressure released the killers of its citizens, yes I am talking about "Raymond Allen Davis" !!! Please don't check your spine, it disappeared a long back !!!
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Nov 14, 2014 09:45am
@Zak where does it say that India has agreed or has surrendered meekly, you want that to happen but the news says something else...alteast India had an opinion and resisted...what are you doing by the way? US has agreed to look into India's points and its under discussion, get it?
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Nov 14, 2014 09:48am
@Ali Shah so how do you say, the same agreement was signed, there were discussion and alternative sent and a new agreement signed..just dont jump the gun and try to prove things that ur soul fancies....India is trying to gets its point across and just not blindly sign something...
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Nov 14, 2014 09:48am
@Ali Shah , India has been asking for some changes in this agreement and finally we got what we wanted .
we were never averse of this PACT and it was all about how our demands are incorporated in this .
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Nov 14, 2014 09:49am
@Ali Shah Did you even read the article?
Breakthrough has happened. As far as in indian media they have agreed to our condition of stock piling for our poor. Or we weren't signing any deal till issue is resolved.
Why now do we have to block other economic engagements when our conditions are met?
Hail pm modi for not giving under pressure and getting indian interests addressed and passed.
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Nov 14, 2014 09:51am
If money can be collected from different people in the name of tax and distributed freely in the name of salary to different individuals having better 'brains'.
Why, food shouldn't be collected and distributed at lesser price to the people having smaller stomach (poor).
In the late 1900's India saw people dying without food because of poor monsoon. So, such system not only helps distributing at lower price but also planned to help the whole country to overcome famine in future. Food is a basic need for all living things (not just humans). "Food should never be accounted as a commodity in trade".
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Nov 14, 2014 09:54am
@Ali Shah You are right..... But the Dawn Article itself says no one knows what is the agreement or Deal signed between the US & India, so.... We cant shoot in the dark without knowing the details,
People Criticize India for not doing enough to curb Poverty & Criticize us for programs like Mars Mission by Quoting examples of Poverty.... But when India provides subsidized food to it's poor, the World Bodies Criticize India for not following the "Best Practices" of free Trade!
I guess Criticism will continue no matter what you do..... But the fact that India is a Big Player in the WTO cannot go unnoticed.... I am sure India will not let down its farmers, the Poor and the larger Interest of India
But like you say.... If India has agreed to accept a cap of 10% on Subsidy.... I will be disappointed
So.... Lets wait and watch!
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Nov 14, 2014 09:56am
@Zak get well soon buddy!!!
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Nov 14, 2014 09:58am
@Ali Shah we got what we wanted. In negotiations there are always a Win-Win situation possible...read the complete story first (may be from other source, if you can't comprehend it from here) before blindly criticising....
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Nov 14, 2014 10:01am
@rohit It shows your deep rooted hatred for pakistan
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Nov 14, 2014 10:01am
I am skeptical whether countries and companies really play by the spirit of free trade. For both India and the US, discontinuing or reducing farm subsidies are not going to be easy options due to political pressures from legislature and farming lobbies. Neither is the promised elimination of subsidized food sales. If at all there is one unintended benefit of discontinuing stockpiling in India is the reduction of waste. Approximately, 40% of the stockpiles are lost to rodents (both four-legged and two- legged ones) and weather induced decay due to poor storage practices.
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Nov 14, 2014 10:04am
India was able to do it ,because Indians love their country and their leaders don,t plunder their country.
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Nov 14, 2014 10:04am
Good sons -daughters. They work hard and send money to their homeland. Bravo.
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Nov 14, 2014 10:18am
@saqib: Where is "Deep rooted hatred" in Rohit's comment? He's only egging Pakistan to catch up. ;)
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Nov 14, 2014 10:23am
@Zak on the contrary US fully accepted indias proposal in toto
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Nov 14, 2014 10:51am
@Zak Your statement was relevant in 1980s. Currently no one can dictate their terms to Indians simply because of the huge market it has. There will be no drone strike even in Pakistan once their yearly import reaches the current figure of India.
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Nov 14, 2014 10:56am
Even though the details are sketchy, this is a major victory for India. Make no mistake also that since other countries did not speak out, this deal is India-US specific as can be seen by the fact that there is an underlying bilateral agreement that guarantees India's food security.
Food security is a must for India and other developing countries, not least of all because the cap was set based on prices and agricultural output from 3 decades ago. Developing countries with large populations also typically do not have direct cash programs like food stamps in the US which fall outside the purview of this cap.
It is fortunate for India that Modi came to power at the right time and vetoed the TFA to leverage this deal. The previous UPA government had hoodwinked the people of India by stating that the peace clause was valid even after 2017.
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Nov 14, 2014 11:01am
@Sridhar: Stockpiles are lost due to mismanagement. There is mismanagement by the government itself as they do not rotate stocks, corruption in sourcing, loss during transportation and finally and most importantly, corruption and mismanagement in the inventory of food stocks.
Some of it especially the warehousing part is going to be privatized soon and that would change things for the better.
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Nov 14, 2014 11:31am
It would be interesting to observe the debate in indian parliament when the details are tabled and the tradeoff's.
raghu
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Nov 14, 2014 11:40am
Great!! Proud of the leadership
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Nov 14, 2014 11:43am
Instead of thanking India for helping developing countries to get a better deal, as usual these ungrateful will never appreciate anything.
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Nov 14, 2014 11:53am
@Ali Shah You can check the details about the deal here:
http://www.thehindu.com/news/national/us-resolve-impasse-over-food-security-issues-at-wto/article6594065.ece
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Nov 14, 2014 11:53am
Why India has not disclosed what is agreed upon? BJP has started showing its true colours. Hope it is routed in the coming elections as a severe warning not to indulge in keeping the nation dark when such an important agreement is signed.
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Nov 14, 2014 12:07pm
For all those who think India Surrender to US the u r fool paradise its other way round!
1 India always ready for FTA. never said they r against it
2. only one contention is Peace clause which will automatically expire in 2017 if no further movement in this clause!
3 Peace clause: if any country stock pile more then 10 % after 2017... then those country will b challenged in court of law
4. India successfully deferred the peace clause beyond 2017 if No agreement reached ! But agree to work on urgent basis before 2017. Who is Winner?
Show some Spine in Drone Case! :)
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Nov 14, 2014 12:27pm
@Devil hahaha, lovely!
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Nov 14, 2014 12:36pm
@saqib No brother, We just want everyone to grow together and make a social harmony. No offense meant visible from Rohit's comment..
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Nov 14, 2014 01:09pm
@Ali Shah This is a compromise, signing the FTA means the impasse at the WTO will end - a victory for the US; on the other hand India cannot be hauled up before the WTO till a "permanent solution" is found for its subsidy policy. You will recall the WTO ministerial meeting in Bali last year provided a four-year time frame (the so-called "peace clause") i.e. till 2017 for all countries to fall in line with WTO's cap on food subsidies. India has bought itself more time.
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Nov 14, 2014 01:24pm
@jen Whether the nation is in the dark or not, you surely are in the dark. Keep smoking and hope that this party is routed in the next election. Your dream will never materialise.
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Nov 14, 2014 02:11pm
@Devil Goood & Gr8 Answers
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Nov 14, 2014 02:11pm
@Zak I know ! India should learn from Pakistan how to have independent foreign and internal policy and not get dictated by US, China, Saudi Arabia etc..
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Nov 14, 2014 02:27pm
@Mohyal we never pretended to be independent of super power dictates, but Indias pretence has been publicly exposed. " Thumb print here "said the Americans and they did quickly and quietly.
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Nov 14, 2014 02:29pm
@Gaurav Arya 1.5 trn economy , foreign borrowing .5bn annual deficit 120bn. Circular debt is dizzying. Round and round.
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Nov 14, 2014 02:31pm
@Devil and a certain godawarey got properly , thoroughly searched in New York. Her job was to represented the nation.
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Nov 14, 2014 02:49pm
@Bahadur - Yeah, that's all we need "egging" and sarcasm from you guys...must be really good at it, offering it. Some inherent complexes difficult to get rid off!!!
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Nov 14, 2014 02:56pm
Dawn has not reported full report what other international media are reporting,International media says the WTO breakthrough between India-US is victory for PM Narendra Modi.US has agreed to retain the "Peace Clause" beyond 2017 "Indefinitely" until the permanent solution on food security was reached and which is exactly India is asking for i.e earlier the peace clause had its validity till 2017 but under new India-US agreement it is "Indefinitely until the Permanent settlements" is reached under which India's subsidy will not be challenged in WTO whatsoever till permanent solution is achieved.India is among few influential country in the world that is considered as a hard negotiators So those pakistanis say India succumbed then think again and if possible try to follow other international media other than dawn or any other pakistani sites.India got what it wanted and US got what it wanted so both agreed and WTO standoff ends clearing the way TFA to now be implemented.
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Nov 14, 2014 03:14pm
Any body who thinks India has been denied of their stand on WTO. I suggest them to watch some International news channels like bbc CNN or all Jazeera. He /she would get an accurate glimpsr of India's foreign policy and it's win at WTO.
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Nov 14, 2014 03:19pm
@jen it's not important to tell everything in public. Modi know what and when to tell. :-)...
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Nov 14, 2014 03:22pm
@Zak even country like USA has debt. So what? And what about Pakistan? It can't survive even for one month if doesn't get aid from USA and world bank. At least we don't beg anyone.
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Nov 14, 2014 03:45pm
Any body who is under misconception that India's stand at WTO has been deniers, I suggest the gentle man/ woman to watch some international news channels like BBC CNN AL Jazera to get the right information.
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Nov 14, 2014 04:45pm
@Gaurav Arya What a joke ? India already crossed 2 trillion dollar GDP Nominal and 7 trillion dollar GDP PPP .
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Nov 14, 2014 04:48pm
What a joke ! Most of the subsidized grains are sold in black market for making cheap rice liquor. What else do you expect from the ration shops except to hear a "No" when you ask if rice has come or not !
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Nov 14, 2014 06:12pm
@rohit India is moving backward and still oppressing Muslims in kashmir
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Nov 14, 2014 07:22pm
They have agreed to India's concerns and demands.
This ensures all developing and underdeveloped nations' interested. It would be most beneficial to African nations and few countries from previous USSR regime .
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Nov 14, 2014 07:25pm
This will project Modi's image further for third world nations. He reversed the congress govt. submission to these superpower exploiters of poor countries.
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