The Government has also announced that it will import sensitive items through State Trading Agencies. However, soya oil and palm oil which are already flooding our markets are not the list of canalised imports. Further, while the bound rate for tariffs on edible oil imports is 300%, the government has kept the tariff for soya oil. This does not benefit the Indian farmer but the seed giant Monsanto and the grain giant Cargill, abnormally low at 45%. The announcement of a “war room” might reassure some people. But such militaristic metaphors could only emerge from thinking which sees economics and trade as war. Tragically, the EXIM policy has declared a war against the hardworking people of India, but the “war room” will fail to see the victims of this war, as millions are pushed into hunger and destitution. The problem with the free trade logic is that it puts trade above people’s lives and shifts government focus from the welfare of people to the promotion of exports and imports. The EXIM policy makes this singular focus that neglects people but protects trade very evident. The destruction of the economy of a billion people is being destroyed with a pathetic target exports by 2005 accounting for 1% of global trade.
In any case, the rush to remove QRs is not justified. India’s trading partners had accepted the deadline of 2003. Only the U.S. had called for the removal of QRs by 2001. In Oct 1997, the United States initiated action at the WTO Dispute Settlement Body (“DSB”) to establish a Panel to examine this dispute. In its request, the United States considered that quantitative restrictions maintained by India, including but not limited to the more than 2,700 agricultural and industrial product tariff lines notified to the WTO in Annex I, Part B of WT/BOP/N/24 dated 22 May 1997, appeared to be inconsistent with India’s obligations under Articles XI:1 and XVIII:11 of GATT 1994 and Article 4.2 of the Agreement on Agriculture. Furthermore, its contention was that the import licensing procedures and practices of the Government of India were inconsistent with fundamental WTO requirements as provided in Article XIII of GATT 1994 and Article 3 of the Agreement of Import Licensing Procedures.
The DSB established the Panel on 18 November, 1997, with the following terms of reference:
To examine in light of the relevant provisions of the covered agreements cited by the United States in WT/DS90/8, the matter referred to the DSB by the United States in the document and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.
In other words, the US demanded a much shorter phase-out period for the removal of Quantitative Restrictions.
In April 1999, the WTO Panel ruled in favour of the US. The Panel chose to only take in to account the IMF position that India’s balance-of-payments situation was not such as to allow maintenance of measures such as QRs for BOP purposes and therefore India was not justified in maintaining its existing measures on the pretext of BOP problems.
The Government of India at this stage did not raise any arguments by way of exerting its rights as a founding member of the WTO, premised on the probable recurrence of BOP problems due to increase in imports.
The Panel asked the parties to negotiate a new implementation/phase-out period. The Panel also recommended that DSB ask India to bring the measures at issue into conformity with its obligations under the WTO Agreement.
In May 1999, India notified the DSB of its decision to appeal against certain issues of law in the Panel Report and filed a notice of Appeal with the WTO Appellate Body.
In August 1999, the Appellate Body rejected India’s appeal. Among other things the Appellate Body upheld the Panel’s finding that it was competent to review the justification of India’s balance-of-payments restrictions under Article XVIII:B of the GATT 1994.
In September 1999, the Indian Government indicated to the US that it required more than the normal 15-month period to remove QRs. However, the latter did not agree to this time schedule, though all other trading partners did.
In December 1999, by the exchange of letters between two trade bureaucrats, Susan Esserman of the US Commerce Department and N. N. Khanna of the Indian Ministry of Commerce, an agreement between the two governments was executed to the effect that:
a) on or before April 1, 2000 India could notify to the United States a listing of up to but no more than 715 items of the 1,429 items on which India currently maintains quantitative restrictions, and with respect to the up-to-715 items so notified, the reasonable period of time expired on April 1, 2001 and
b) with respect in all the other items, the reasonable period of time expired on April 1, 2000.
This agreement in effect drastically shortened the phase-out period to 2001 by which date all QRs on 1,429 items would be lifted. This is despite the fact that the European Union and other countries had agreed to a phasing out of import restrictions by March 2003. But the Indian Government, bowing to pressure from the US, advanced the lifting of QRs by three years.
However, the U.S. is itself violating international obligations such as backing off the Kyoto Protocol to regulate CO2 emissions though it is the biggest polluter. Responsibility is two way lane. And the lack of responsibility being shown by the U.S. in respecting international commitments should have been used by India to gain space in setting policy that ensures her people’s survival. In any case, India is arguing for maintaining QRs in the review of the Agreement on Agriculture. It should have maintained QRs as a right.
It is also arguing for a livelihood and food security exemption from the rules of the Agreement on Agriculture. Instead of defending the livelihoods and food security of the country, the Commerce Minister has threatened the survival of the Indian people, especially the farmers twice over firstly, through removing restrictions on imports and secondly by announcing an agribusiness centered export oriented policy for agriculture. This “farm-to-port” export policy is a recipe for corporatization of Indian agriculture. It will undermine our food security. Farmers lose markets by imports of artificially cheap products due to removal of QRs. They will lose their land, their water, their homes as corporations take over Indian agriculture to grow flowers and vegetables and fruits and shrimps for exports, with state support.
The Commerce Minister has through his EXIM policy committed India’s markets, soil and water as public subsidies to global corporations. Barbie dolls might flood super market shelves soon but how will the poor be fed if they have no livelihoods? How will farmers survive when both markets and resources have been snatched away from them?
Vandana Shiva, writer and “ecological scientist”, directs the Research Foundation for Science, Technology and Natural Resource Policy in New Delhi. Her current work centers on biodiversity and sustainable agriculture.