Based on U.S. calculations, it appears that India has underreported about its market price support programs for wheat and rice from marketing years 2010-11 to 2013-14. When calculated, according to WTO Agreement on Agriculture methodology, India’s market price support for wheat and rice far exceeded its allowable levels of trade distorting domestic support.
The U.S. counter notification statement, published by the WTO, specifies that India may provide subsidies equal to no more than 10% of the total value of crop production. In the years covered in the CN, the United States demonstrates through India’s own data that its price support appears to be the equivalent of 60% to 68% of the value of production for wheat and 74% to 84% of the value of production for rice.
|U.S. Trade Representative Robert Lighthizer|
“The United States expects our trading partners to comply with the reporting requirements they agreed to when joining the WTO,” Lighthizer said. “Accurate reporting and improved transparency of these programs is an important step in ensuring that our trading partners are living up to their WTO commitments and helps achieve more market-based outcomes through the multilateral trading system.”
The USTR noted that the counter notification was filed on May 4 and is the first ever COA notification under the WTO Agreement on Agriculture regarding another country’s measures.
The CN received applause from the U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG).
|Mike Miller, chairman of USW|
“The proactive use of WTO tools like counter notifications and dispute settlement will help build support for the global trade rules that provide a bulwark against market distorting policies that hurt American farmers,” said Mike Miller, chairman of USW.
The associations also noted the work partnered work of the USTR and the USDA in addressing the issue.
“India’s large price support program has a negative effect on international markets,” said Jimmie Musick, president of NAWG. “We welcome this signal from our government that it is not going to accept obvious attempts to cheat the system by India and other countries. We thank the USTR and USDA for its creativity in challenging this policy by being the first country to use the WTO’s counternotifications rule on agricultural domestic support.”
The United States expects a thorough discussion on how India implements and notifies its policies at the next COA meeting, which is scheduled for June 2018.