US Criticizes India's Rice Exports at WTO for Violation of “Bali Interim Decision”

The United States has questioned India's "rapidly rising" rice exports in 2021, accusing it of violating the WTO's 'Bali interim peace clause' by exceeding subsidy limitations without separately reporting its public stockholding (PSH) programs.

New Delhi told WTO members at a recent Committee on Agriculture meeting that its rice export, estimated at 21.4 million tonnes in 2021, was not generated from its rice stockpiles from PSH programs acquired at MSP (minimum support price).

"The United States, on the other hand, recommended using a specific provision in the Bali interim decision to open a consultation with India on the issue." "Washington's proposal was supported by Canada, Japan, the European Union, Paraguay, Thailand, the United Kingdom, and Uruguay," a Geneva-based trade official told media.

In early 2020, India told the WTO that it had surpassed the subsidy ceiling for rice in 2018-19, which was set at 10% of the value of food output for developing countries (under the Agriculture Agreement). It gave rice farmers $5 billion in subsidies in return for $43.67 billion in rice production during that period.

To prevent other members from taking legal action as a result of the breach, India triggered the 'peace clause,' which was agreed to at the WTO's Bali Ministerial meeting in December 2013 and allows developing countries to violate food subsidy constraints if certain conditions related to notifications and food security are met.

"India failed to fulfill the obligation set out by the Bali interim decision, which necessitates a separate notification on members' PSH programs," the official added.

A single announcement covering all PSH programs would be challenging for India since it would have to specify all MSP processes and data relating to procurement, storage, and disbursement not just for rice but also for other goods covered by the programs, such as wheat and pulses.

Many members are skeptical of India's repeated claims that it has given all relevant information to the WTO about its total domestic support notifications.

The EU and others have previously said that further documentation from India was required to prove that subsidized rice was not being dumped on the global market. At the agricultural committee meeting, the US suggestion for a special consultation with India got immediate approval from all of these countries, according to the official.

"If the special consultations on India's PSH programs are held, and India is unable to persuade other members that it has complied with the notification conditions specified in the Bali peace clause, it may lose the exemption from legal action provided by the clause," the official noted.