Defiant India threatens to derail WTO Bali talks

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With just one day left, New Delhi stance gains supporters

Defiant India threatens to derail WTO Bali talks
Nusa Dua (Indonesia): Divisions over food subsidies widened among members of the World Trade Organisation on Thursday, making it unlikely a landmark trade deal could be reached with just a day left to the end of talks.

After 12 years of fruitless negotiation, diplomats warned that failure at a meeting this week on Indonesia’s resort island of Bali would devastate the body’s credibility as developed nations turn towards regional and bilateral trade talks.

A Bali trade deal, already diluted to the ‘low-hanging fruit’ of the moribund Doha round of talks, largely hinges on India and whether the world’s second most populous country can find common ground with the United States and other developed countries on food subsidies.

India has repeatedly said it will not compromise on its policy of subsidizing food for hundreds of millions of poor citizens. The tough stance has started to gain backers from developing countries in Asia, Africa and South America, trade minister Anand Sharma said.

“Countries with maybe more than 75 per cent of the world’s population stand by India on this issue,” Anand Sharma told reporters. “It is better to have no agreement then to have a bad agreement.”

Around 20 countries were in favour of India’s position, said a diplomat, who asked not to be identified because of the sensitivity of the issue.

India will next year fully implement a welfare programme to provide cheap food to 800 million people that it fears will fall afoul of WTO rules curbing farm subsidies to 10 per cent of production.

The programme, which relies on large-scale stockpiling and purchases at minimum prices, is a central plank of the government’s bid to win a third

A proposal led by the United States offered to waive the 10 per cent rule until 2017. But India has rejected it, demanding the exemptions continue indefinitely until a solution is found.

The trade talks also involve less contentious issues, such as assistance for the least-developed countries and setting standards for handling the cross-border shipment of goods.

Estimates of the value of the Bali deal to the world economy vary, with some as high as $1 trillion. Experts say it would be far more important than abolishing import tariffs globally, since bureaucracy and opaque rules are a bigger brake on trade.

If the talks fail, the WTO may see its role as global custodian of the world’s trade rules being eroded by regional pacts now being negotiated, such as the US-led 12-nation trans-Pacific partnership and a US-EU tieup known as TTIP.

“Let us not sugarcoat reality: leaving Bali this week without an agreement would deal a debilitating blow to the WTO as a forum for multilateral negotiations,” US trade representative Michael Froman said on Wednesday.

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