India holds up passage of global trade pact

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br G20-BUSINESS Reuters Australia's Trade Minister Andrew Robb says assurances have been given to all signatories to the WTO trade facilitation treaty that their concerns will be addressed. Photo: Reuters

Sydney - Eleventh-hour negotiations to win Indian approval for a breakthrough global trade pact might not have succeeded in the end despite initial signs of progress, sources involved in the discussions said at the weekend.

India is the most prominent among a group of developing nations angry at rich countries for failing to address their concerns about a deal on trade facilitation that must be detailed by a July 31 deadline. The deal was struck by World Trade Organisation (WTO) member states in Bali last year.

Proponents believe the deal can add $1 trillion (R11 trillion) to global gross domestic product and create 21 million jobs.

But India’s trade ministry said on Wednesday it would “find it difficult” to support the protocol unless it was satisfied that adequate emphasis was being placed on negotiations about food security and other issues important to poor countries – sparking furious negotiations at the Group of 20 trade ministers meeting in Sydney.

Three officials involved in the negotiations, speaking on condition of anonymity, expressed exasperation with what they described as a history of erratic behaviour on the part of the Indian trade team that made it difficult to trust.

The officials said India had not provided any clear description of exactly what changes it would like made to the agreement, although it would not matter anyway because no concessions were on offer given how difficult the negotiations had proven to conclude the first time round.

The Indian demands appear to have shaken confidence in the new government of Narendra Modi, which came to power in May with a pro-business agenda but appears set to derail what several officials called the most significant global trade pact in two decades.

Australian Trade Minister Andrew Robb said assurances had been given to all of the signatories to the treaty that their concerns would be addressed and he expressed optimism that the impasse would be resolved before the deadline.

“There was strong resolution around the table that India’s issues to do with food security would and should be addressed as decided previously and I think there will be discussions about how to satisfy the Indians and they won’t be left behind,” Robb said.

The row over subsidies has raised fears that the so-called “trade facilitation agreement”, the first ever global trade agreement under the WTO, will be derailed.

A deal was only reached after New Delhi extracted promises that its concerns related to food subsidies would be addressed.

India stockpiles food for its poor, putting it at risk of breaking current WTO rules. In Bali, WTO members agreed to give India a pass until 2017, while negotiating a permanent solution.

“We are focused on implementing the full Bali package that will deliver for every country involved,” said Michael Froman, the US Trade Representative. “Reinvigorating the multilateral system is too important to put at risk with any backsliding on commitments.” – Reuters

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