India Threatens to Derail WTO Deal, Prompts Angry US Rebuke

Mangalore Today News Network

New Delhi/Geneva, July 26, 2014:  India threatened on Friday to block a worldwide reform of custom rules, which some estimates say could add $1 trillion (Rs. 60 lakh crore) to the global economy and create 21 million jobs, prompting a U.S. warning that its demands could kill global trade reform efforts.

Diplomats from the 160 World Trade Organisation member countries meeting in Geneva had been meant to rubber stamp a deal on "trade facilitation" that was agreed at talks in Bali last December in the WTO’s first ever global trade agreement.

But India, in an 11th-hour intervention, said it would only back the accord if its concerns over food security were met. It said a permanent WTO deal on food stockpiling must be in place by the end of 2014, not by 2017 as previously agreed.

"India is of the view that the Trade Facilitation Agreement must be implemented only as part of a single undertaking including the permanent solution on food security," Indian Ambassador Anjali Prasad told the WTO meeting.

"My delegation is of the view that the adoption of the TF (trade facilitation) Protocol be postponed till a permanent solution on public stockholding for food security is found."

The ultimatum revived doubts about the future of the WTO as a negotiating body, and the U.S. ambassador to the organisation, Michael Punke, said that Delhi’s stance could derail the whole process of world trade liberalisation.

"Today we are extremely discouraged that a small handful of members in this organisation are ready to walk away from their commitments at Bali, to kill the Bali agreement, to kill the power of that good faith and goodwill we all shared, to flip the lights in this building back to dark," he said in a statement.

If the Bali agreement fails, there can be no ’post-Bali’, he said, referring to the next stage of world trade reform planned in Geneva. But it was not too late to meet the July 31 deadline.

"WHOLE WORLD WATCHING"

"We still have a few days. But while the deadline is fixed and firm, the real issue isn’t time. The issue is, will all WTO Members keep their commitments? ... In the next few days we’ll find out. The whole world is watching," Punke said.

India’s stance is a replay of the hard line it took at the Bali conference last December. But many diplomats expressed surprise that it had effectively reopened that negotiation at a meeting that should have been a formality and marked a turning of the page after a decade of negotiating failure.

India’s opposition attracted support from Cuba, Venezuela and Bolivia, who told the WTO meeting on Friday they were disappointed that only the rich countries had got what they wanted from the Bali conference.

But dozens of other members, including developing countries such as Nigeria, Pakistan and Thailand, urged them to drop their opposition and back the trade facilitation deal, as they had all agreed to do in Bali.

The deal is meant to open the way to further negotiation of some elements of global trade talks launched in Doha in 2001, which India has long sought.

A failure to overcome India’s objections by early next week could overshadow a planned visit to New Delhi by U.S. Secretary of State John Kerry, which begins on July 30.

As well as causing concern abroad, India’s tough position has drawn criticism at home from a leading industry group and has surprised those who expected newly elected pro-business Prime Minister Narendra Modi to radically slash subsidies.

PM Modi has vowed to spur economic growth through sweeping changes to policies that many people felt had stagnated under the outgoing administration, and his every step is being closely monitored at home and abroad.