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WTO talks on trade facilitation set to fail as India plays hardball, says the deadline must be postponed

India is of the view that the Trade Facilitation Agreement must be implemented only as part of a single undertaking.

WTO talks on trade facilitation are all set to fail with India reiterating its hardline position. WTO talks on trade facilitation are all set to fail with India reiterating its hardline position.

WTO talks on trade facilitation are all set to fail with India reiterating its hardline position that the Trade Facilitation Agreement (TFA) and the one on food subsidies had to be concluded together.

Though the deadline for signing the protocol for TFA is July 31, and the Bali ministerial agreed to a four-year time frame for dealing with issues concerning public holdings of food stocks, India wants a visible solution by October that would include a dedicated Special Session of the Committee on Agriculture to arrive at a permanent solution by December 31.

“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,” India stated in the WTO’s general council meeting at its Geneva headquarters.

Last December’s Bali Ministerial signalled the WTO’s capability to deliver outcomes, India stated at the council, adding, however, that the country’s expectations have been “completely belied by the developments after the Ministerial”. “A clear will to engage in areas of interest to developing countries is conspicuously absent. To make matters worse, persistent efforts are being made to subvert the mandate by divesting it of its core elements,” India lamented.

Making its position clear, New Delhi said that the adoption of the TF Protocol — the deadline for which is July 31 — be postponed till a permanent solution on public stockholding for food security is found. “The Bali outcomes were negotiated as a package and must be concluded as such. Timelines are important but we cannot afford to act in haste in the WTO ignoring the concerns expressed by members,” India’s representative Anjali Prasad said at the council.

While India attaches importance to the stockholding issue given the new food security law, some experts, dismissed the country’s tough stance as misplaced brinkmanship given India’s food subsidies are well below the cap of 10% of the value of production.

It is, however, believed the TFA could potentially add $1 trillion to the world economy thanks to easing of customs procedures and trade infrastructure creation it mandates.

The 28-member European Union, which aggressively pitches for all WTO members signing the protocol on TFA by July 31, said on Thursday: “A great opportunity to mobilise trade as an instrument for growth and development would be lost” if the July 31 deadline is missed. “The credibility of the WTO, which has during the financial crisis proven its value as a firewall against protectionism, would be further damaged.”

US ambassador Michael Punke cautioned in a speech at the WTO, “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.”

To move forward on the Doha Development Agenda to which India is committed, Prasad suggested a four-point course of action: Establish immediately an institutional mechanism such as a dedicated Special Session of the Committee on Agriculture to find a permanent solution on public stockholding for food security; evolve clear-cut procedures, timelines and outcomes under this institutional mechanism so as to arrive at a permanent solution by 31st December, 2014; adopt a similar approach on all other elements of the Bali package notably the LDC issues; and review the progress of these accelerated discussions in October 2014 by the General Council.

Earlier in the day, stating that food security and development issues have been sidelined at WTO, commerce minister Nirmala Sitharaman told the Lok Sabha that “till there is an assurance and visible outcomes which convince developing countries that WTO members will engage in negotiations to find a permanent solution on public stockholding and all other Bali deliverables, especially for least developed countries, India would find it difficult to join the consensus on the (TFA) Protocol of Amendment”.

fe Bureau | The Financial Express

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