India, US reach breakthrough in row over key WTO pact

November 13, 2014 11:58 am
Washington and New Delhi said Thursday they have resolved a row over Indian food subsidies that blocked a key WTO trade agreement earlier this year/AFP
Washington and New Delhi said Thursday they have resolved a row over Indian food subsidies that blocked a key WTO trade agreement earlier this year/AFP

, NEW DELHI, November 13- India and the United States said Thursday they have resolved a row over food subsidies that has been blocking a landmark global trade agreement for months.

The Trade Facilitation Agreement (TFA) has been stalled since July, when India refused to endorse the pact unless its food stockpiles were exempted from possible punitive measures, prompting the US to accuse it of taking the World Trade Organization “to the brink of crisis”.

But on Thursday both sides agreed India’s food security programmes would not be challenged under WTO rules “until a permanent solution regarding this issue has been agreed and adopted”, a US government statement said.

The White House said the deal would “unlock progress toward the full and immediate implementation of the WTO Trade Facilitation Agreement, which will lower the costs of trade for developed and developing countries”.

India said it was “extremely happy that India and the US have successfully resolved their differences relating to the issue of public stockholding for food security purposes”.

“This will end the impasse at the WTO and also open the way for the implementation of the Trade Facilitation Agreement,” India’s Commerce Minister Nirmala Sitharaman said.

While refusing to give details on the agreement between the two governments, Sitharaman said India would now present new proposals to the WTO’s general council, which she expected to meet next month.

“It’s an Indian proposal, obviously the US will certainly help in shepherding this proposal,” she said at a press conference in New Delhi.

“We are not here to dictate terms to the WTOWe want our proposals to be considered, discussed and hopefully adopted.”

WTO Director General Roberto Azevedo has been tirelessly campaigning to save the deal, which would streamline global customs procedures and, he claims, create billions of dollars in benefits each year.

– Negotiations ‘paralysed’ –

Last week, he said the impasse had “effectively paralysed the multilateral negotiations in the organisation”, calling it the “most serious crisis the WTO has faced”.

India’s new Prime Minister Narendra Modi discussed the issue with US President Barack Obama when he visited Washington in September, raising hopes of a breakthrough.

New Delhi’s decision in July to hold up the landmark deal to reduce trade barriers came after the WTO’s members agreed at a December, 2013 meeting in the Indonesian island of Bali to implement the pact.

India and its supporters in the developing world have argued that food stockpiling is essential to ensure poor farmers and consumers survive in the cutthroat world of business.

“Many countries saw merit in what we were asking for,” Sitharaman said.

“India was never alone nor was it isolated. Others unfortunately were simply not speaking up.”

But stockpiling and subsidies for the poor are considered trade-distorting under existing WTO rules.

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