India to reportedly dismiss US notification at WTO COA

India will reportedly dismiss a US counter-notification at the World Trade Organisation (WTO) alleging New Delhi’s market price support (MPS) for cotton breached the permitted levels of trade-distorting domestic support in the past seven years. India’s subsidies to its cotton farmers exceeded the 10 per cent limit for developing nations, it was alleged.

US Trade Representative Robert Lighthizer and secretary of agriculture Sonny Perdue said the United States submitted the counter-notification in the WTO Committee on Agriculture (COA).

The United States has questioned India’s ‘dramatically’ under-reported notification on cotton submitted a few months ago. India will categorically dismiss the notification on cotton when it comes up for consideration at the WTO special negotiating session, an Indian business daily reported quoting a top official.

Washington’s latest nine-page counter-notification, the second of its kind after a similar notification on India’s rice and wheat months ago, said India’s apparent MPS for cotton appears to have been between 53 per cent and 81 per cent of the value of production in each year between 2010 and 2017.

The market price support for agricultural commodities is calculated as the difference between the applied administered price and external reference price prevailing in 1986-88 multiplied by eligible production.

India is opposed to that methodology to calculate MPS. India, along with more than 45 countries of the G-33 farm coalition, had demanded that the MPS must be calculated by using an external reference price of a recent period instead of 1986-88, which was taken into consideration after the Uruguay Round of trade negotiations.

But the United States, the European Union, Japan, Norway and Switzerland vehemently blocked India’s efforts for changing the methodology.

Moreover, the United States has used the rupee for calculating the market price support, while India calculates in dollar terms, which reportedly makes a tremendous difference The former was wrong to use total production for the calculation of MPS as opposed to India’s calculation based on the procured production, analysts point out.

The United States wants a robust discussion on the issue at the next COA meeting scheduled for November 26-27.