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India stands firm despite global pressure to endorse trade facilitation deal in WTO

Saturday, 26 July 2014 - 8:03pm IST | Place: Mumbai | Agency: dna webdesk

India seems to be in no mood to yield to pressure from global superpowers to endorse trade facilitation deal in WTO. For now India's stand is to safeguard its own interest than think of global repercussions in this issue. India wants to halt the trade facilitation timetable till the time a permanent solution on public stockholding for food security is not found According to WTO rules, total subsidy on food can't exceed 10% of total agricultural production. This clause is not acceptable to Indian officials who want some concrete assurance regarding it before signing the customs treaty. 

India's rigid stance regarding worldwide reform of trade facilitation though has not gone down well with most countries. Without directly naming India, USA has expressed its disappointment at “backsliding” of talks. 

This deal on trade facilitation was agreed on principle in Bali last year. But with change of government in the centre, India's stance has also undergone a distinct shift. India's dogged objection at the very last moment has not gone down too well with other international players. A section in the media has even speculated that this stalemate at WTO can potentially cast its shadow on John Kerry's visit to India. US ambassador to the organisation, Micheal Punke said that “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,” he said in a statement. 

Also read: Full text: US and Australia left fuming as debate over India's stand at WTO intensifies

In India even, industrialists from some quarters have expressed their apprehension and surprise at the stance taken by the Narendra Modi government. BJP is widely perceived to be investment friendly, hence their opposition to trade facilitation deal does looks counter intuitive. But with government committed to provide extremely cheap food to a vast majority of people, it probably doesn't have much choice either. 

India has virtually rejected US charge of killing Bali agreement. According to a top official who is currently in Geneva, it is unfair to accuse that India is blocking the deal. He said that nobody raised these issues when WTO was blocked repeatedly in the last decade due to objection of some developed country. 

In Bali last year members including India agreed on package comprising an agreement on TFA and issues relating to agriculture and development. It was agreed that India can continue its food security programme without penalties till 2017. However since then 20 meetings have been held on trade agreements and only two on agriculture. Thus Indian side is apprehensive that once TFA is signed other sections of the Bali pact gets diluted. This is why India is unlikely to budge without getting some assurance regarding food security. Even Association for Chambers of Commerce and Industry of India has sided with the central government in this issue. 

India wants the entire issue to be decided later after its concern is addressed. Majority of the countries who are for the deal can pass it through a simple majority. But conventionally decisions have been taken by consensus. Many still believe a consensus deal can be hammered out by 31st July. Although chances of that happening are deeming by the hour. A clash looks imminent. How Narendra Modi's government holds his own in front of global pressure will be the think to look out for. 

Read Also : Why is India not agreeing to the WTO trade facilitation agreement


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