The Telegraph
Friday , August 1 , 2014
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Talk show to ease trade tension

John Kerry and Sushma Swaraj in New Delhi on Thursday. Picture by Ramakant Kushwaha

New Delhi, July 31: US secretary of state John Kerry tried some last-minute fire-fighting to get India on board for a WTO deal in Geneva during his meetings here today with Indian finance minister Arun Jaitley and external affairs minister Sushma Swaraj.

At a press briefing after the meeting with Kerry, Swaraj said, “Negotiations are on way at Geneva, and they are continuing.”

“We do not dismiss the concerns of India we believe there is a way to provide for that. A compromise between the two objectives is achievable,” said Kerry at the same press meet.

Kerry is hopeful that differences between India and much of the rest of the world over a major trade agreement will be resolved in time, with only hours remaining before the deal has to be signed.

“We are obviously encouraging our friends in India to try to find a path here where there is a compromise that meets both needs, and we think that’s achievable. We hope that it’s achievable,” he said.

But he had earlier warned his hosts that they stood to lose if they refused to budge.

“Right now India has a four-year window where it’s been given a safe harbour where nothing happens,” he told a new channel.

“If they don’t sign up and be part of the agreement, they will lose that and then (they will) be out of line or out of the compliance with the WTO.”

However, New Delhi has insisted that, in exchange for signing the trade facilitation agreement, it must see more progress on a parallel pact giving it more freedom to subsidise and stockpile foodgrain than is allowed by World Trade Organisation rules.

Diplomats have been taken aback by India’s threat to veto trade facilitation, a deal that aims to speed up trade by standardising customs rules and slashing red-tape.

“I am an optimist, I am hopeful that within the period of today... there is a common ground that is found,” US commerce secretary Penny Pritzker, accompanying Kerry at annual talks with India, told a news channel.

Deal without India?

In Geneva, European diplomats have revealed to the media that the US and the EU may go ahead with a deal minus India, claiming that a dozen or so states were working on this deal.

“If India does end up blocking (on Thursday) there is already a group of members who are interested in pursuing that path,” a source involved in the discussions told Reuters.

“A dozen or so” of the WTO’s 160 members had informally discussed pushing ahead with the trade facilitation agreement with less than 100 per cent participation, the source said.

“It will be a case of who blinks first and if they don’t blink, then it will become a test of unity for BRICS countries in standing fast to a negotiating principle they had agreed upon at meetings held before this trade summit,” said top Indian finance ministry officials.

Diplomats say India could technically trigger a trade dispute if it caused the deal to collapse, although nobody wanted to threaten legal action at this stage.

Pritzker said serious efforts were underway on Thursday to save the deal, which proponents say could add $1 trillion to the global economy and create 21 million jobs.

As officials in Geneva tried to rescue the agreement, India’s trade minister Nirmala Sitharaman said New Delhi’s position remained unchanged.

“There will have to be some sort of face-saving outcome for them if we’re going to go forward, or the US and others will have to paper over their differences,” said a diplomat in Geneva. “In any event the midnight deadline is very very tight.”

An Indian government source told Reuters separately that the Bali deal needed not collapse even if the July 31 deadline is not met.

Finance ministry officials said any compromise that did not give a concrete assurance and timeline on food security for the developing world would be unacceptable.

India will expect China, Russia and Brazil to deliver on promises on this count, said officials. At stake is India’s food security programme that gives cheap food to poor families.

Many other developing countries such as Bangladesh and central African nations have been planning similar programmes and these would be hard hit if the US-EU combine manages to keep such food schemes beyond the pale of WTO rules.

Indian officials said the “peace clause” signed in Bali last December gave India and similar developing nations’ food security plans a temporary reprieve but could make them illegal at a later date.