Frank Jack Daniel and Tom Miles New Delhi and Geneva

INDIA threatened on Friday to block a worldwide reform of custom rules, which some estimates say could add $1 trillion (R10.5 trillion) to the global economy and create 21 million jobs, prompting a US warning that its demands could kill global trade reform efforts.

Diplomats from the 160 World Trade Organisation (WTO) member countries meeting in Geneva had been meant to rubber-stamp a deal on “trade facilitation” that was agreed at talks in Bali in December in the WTO’s first global trade agreement.

But India demanded a halt to the trade facilitation timetable until the end of the year and said a permanent WTO deal on food stockpiling must be in place at the same time, ahead of 2017 target date.

“My delegation is of the view that the adoption of the trade facilitation protocol be postponed till a permanent solution on public stockholding for food security is found,” Indian ambassador Anjali Prasad said.

The ultimatum revived doubts about the future of the WTO as a negotiating body, and many diplomats said Delhi’s stance could derail the world trade liberalisation process.

“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 flip the lights in this building back to dark,” said US ambassador Michael Punke.

India won support from Cuba, Venezuela and Bolivia. But an official at the meeting said the “very, very large majority” of WTO members opposed India’s stance, which was a replay of the hard line it took in Bali in December.

India’s former commerce minister, Anand Sharma, who negotiated the Bali deal, said Delhi had played a critical role in reaching a balanced agreement in Bali but that it had subsequently not secured what it had sought. “It was expected that the [trade facilitation agreement] would move along with the issue of public stockholding… but it seems it has not happened. That is unacceptable,” Sharma said.

However, WTO diplomats said Sharma had agreed in Bali to a four-year timeline for a deal on stockpiling and a much shorter one for trade facilitation. Many were surprised that India had effectively reopened the Bali talks just as the WTO appeared to have turned the page to a potential new era of trade talks after a decade of negotiating failure.

“Many members… have noted that, if the Bali package fails, there can be no post-Bali. It’s with regret that we agree with them,” Punke said. “We still have a few days. But while the deadline is fixed and firm, the real issue isn’t time. The issue is, will all WTO members keep their commitments?”

Unless India succeeds in changing the timeframe, the deadline for agreeing the trade facilitation is July 31, at which point it will lapse. – Reuters