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India derails WTO talks, but insists deal on food security still possible

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By The Telegraph Online
  • Published 1.08.14

New Delhi, Aug 1 (Agencies): The World Trade Organisation failed to reach a consensus in Geneva on a global customs pact in the face of India’s insistence that its proposal on food grain stockholding be considered first.

But India said Friday it remains committed to the pact, called the Trade Facilitation Agreement (TFA), and will continue to pursue its proposal to find a permanent solution to its food security issues.

Commerce Secretary Rajeev Kher said the WTO would be on vacation for a month and during this time, India would focus on follow up action.

“This is a good enough time to think about our follow up action. Obviously our proposal is there on the table and we will pursue our proposal,” Kher told PTI.

India had insisted that, in exchange for signing the TFA, it must see more progress on a parallel pact giving it more freedom to subsidise and stockpile food grains than is allowed by WTO rules.

Kher said India was always committed on the TFA. ”We never went back on our commitments with regard to the TFA. We took our proposal (on public stockholding of foodgrains for poor people) to the WTO Director General in a proper manner. But we have not been able (to reach a consensus),” he said.

On the western world blaming India for failure of Geneva talks, Kher said, “There is no question of being blamed... July 31 was not the deadline that could not have been extended. We are committed to the TFA.”

After more than a week of hectic deliberations, WTO chief Roberto Azevêdo reported to WTO ambassadors on Thursday night that despite intensive consultations, “we have not been able to find a solution that would allow us to bridge the gap” on the adoption of the protocol on the TFA.

He urged members “to reflect long and hard on the ramifications of this setback.”

“We got closer -— significantly closer -- but not quite there,” Azevêdo told members as the WTO Secretariat went on a month-long summer break starting Friday.

The deadline to adopt the Protocol on TFA was July 31. It was to be formally implemented in July 2015.

Reacting to the development, US Trade Representative Michael Froman said America regrets that a handful of members have decided not to adhere to their commitment to implement the TFA consistent with the Bali agreement.

“The US has been fully committed to implement all elements of the Bali package, including the decision on food stockpiling, and has provided reassurances and clarifications, as requested,” Froman said.

WTO ministers had agreed the TFA in Bali, Indonesia, last December.

Most diplomats had expected the pact to be rubber-stamped this week, marking a unique success in the WTO's 19-year history, which according to some estimates would add $1 trillion and 21 million jobs to the world economy.

They were shocked when India unveiled its veto and the eleventh-hour failure drew strong criticism, as well as rumblings about the future of the organisation and the multilateral system it underpins.

”Australia is deeply disappointed that it has not been possible to meet the deadline. This failure is a great blow to the confidence revived in Bali that the WTO can deliver negotiated outcomes,” Australian Trade Minister Andrew Robb said on Friday. “There are no winners from this outcome - least of all those in developing countries which would see the biggest gains.”

But the momentum on trade facilitation reforms means it may be hard to stop and some nations have already discussed a plan to exclude India from the agreement and push ahead regardless.

The failure of the agreement should signal a move away from monolithic single undertaking agreements that have defined the body for decades, Peter Gallagher, an expert on free trade and the WTO at the University of Adelaide, told Reuters.

”I think it is certainly premature to speak about the death of the WTO. I hope we've got to the point where a little bit more realism is going to enter into the negotiating procedures,” he said.

”It's 153 countries. We can't all move at the same speed on the same things, and it's time to let those that want to do it, do it.”