I am inclined to the view that failure at Bali may be just what is needed to get the WTO to make a fresh start, creating an agenda that corresponds to the needs of this century not the last. At the same time, I've been impressed by the good work and good will that so many delegations have put into this over the last weeks. So here are my thoughts-prior to the Indian cabinet meeting Monday where, if reports are correct, the government will come up with its alternative position, having rejected the peace clause.
First to recap why India is right to reject the current temporary peace clause proposal (summarizing earlier posts):
1)If the Indian government is concerned with protecting the food security law in the short term, it does not need a peace clause-it can simply defend the law in dispute settlement, invoking, as some have argued, the inflation clause in the Agreement on Agriculture. Given that any dispute would take at least 3 years in all probability to wend its way through the DS system-panel, AB, 21.5 panel and AB, then reasonable time to implement-India already has 3-4 years of flexibility. And the chance of winning in whole or in part, depending on how the inflation argument is received.
2)If the government, on the other hand, is mainly concerned with the long term, the peace clause as currently formulated could be worse than nothing, because to invoke it a Member basically has to make an admission that it is at risk of violation of WTO rules, thus making a defeat in dispute settlement all but certain once the peace clause expires in a few years.
3)By abandoing the goal of supporting a broader effort to address food security in the WTO out of panic about its own legal situation, India would be abdicating a leadership role in the WTO for groups of countries like the G33 and presenting itself as incapable of acting as a major power in today's multipolar world.
4)Worse still, India-a venerable civilization, a great modern democracy, an emerging economic powerhouse-would have shown itself to have been outwitted by low-level Machiavellic intrigue and devilry. That intrigue began when DG Azevedo claimed to India that its food security law violated WTO rules, thus seeking to drive a wedge between India's own national interest in the food security negotiations and the broader common interest of the G33. Figuring that the government's only pressing concern would be in a solution that would get it through the next year's elections, the WTO leadership was pretty sure that India would accept a band-aid peace clause that would serve for political optics: the government could say to the public that the food security law had been "protected". The WTO leadership thought it could even get away with a "trojan horse" in the peace clause, as mentioned, that to use it you admit essentially to violating so the day after it expires you can be hit with largely undefendable dispute claim.
Now where do we go from here?
I propose a solution along the following lines:
1) India should be provided with a waiver for its food security law. A waiver is a familiar oft-used mechanism to protect domestic policy space in a particular set of circumstances. The waiver could say that any other state in similar circumstances would also be eligible to apply for a waiver. The waiver would expire upon the coming into force of a permanent legal instrument on food security.
2)There should be a declaration or understanding at Bali on the negotiation in the coming 2-3 years of such a permanent legal instrument, what it would have to deal with in terms of coverage, how it would relate to the existing WTO Agremments, and also relate to the work of the FAO on food security. The instrument might even be envisaged as a joint WTO/FAO convention. A broad set of issues, including export restrictions, to be addressed by such an instrument would take the debate away from the context of a zero-sum type conflict between developing countries seeking certain specific flexibilities and developed country negotiators, tied to the usual agribusiness lobbies.
3)Finally there shoudl be a meaningful deliverable on trade facilitation at Bali.It could be in the form of a framework agreement that includes: the steps required to achieve meaningful legal commitments on trade facilitation, including specified improvements in customs, infrastructure etc; who is responsible-the WCO, the WTO, development banks, donor countries, developing countries-for taking these steps and providing the needed financial support and technical assistance, and an indicative timeframe. Taking into account the existing still heavily bracketed negotiating text, the framework agreement would include a set of principles that would inform precise legal commitments that would be entered into once enough of the specified steps have occured within the indicative time frame.
If one blends imaginatively hard law and soft law methods with some traditional WTO governance mechanisms, e.g. waivers, this can all be done within a week, I'm confident.
