India threatens to veto customs deal over food clause
New Delhi/Sydney : Negotiations to avoid a deadlock over a major trade deal reached a fever pitch on Thursday just hours before the deadline to seal the deal ends with the US engaging Indian leadership in New Delhi. A group of dozen or so countries, on the other hand, are contemplating to go-ahead with the deal minus India.“If India does end up blocking (on Thursday) there is already a group of members who are interested in pursuing that path,” a source involved in the discussions said.
“A dozen or so” of the WTO’s 160 members had informally discussed pushing ahead with the trade facilitation agreement with less than 100 percent participation, the source said.
An Australian trade official with knowledge of the talks said a group of countries including the US, European Union, Australia, Japan, Canada and Norway began discussing the possibility in Geneva on Wednesday afternoon.
A WTO spokesman said the group’s director-general would hold meetings throughout the day to “avert a crisis. “Delegations are showing real commitment to finding a solution and the director-general remains hopeful that a solution can be found,” he said.The WTO deal must be signed in Geneva on Thursday. But India has insisted that, in exchange for signing the trade facilitation agreement, it must see more progress on a parallel pact giving it more freedom to subsidise and stockpile food grains than is allowed by WTO rules.
The current WTO norms limit the value of food subsidies at 10 per cent of the total value of food grain production. However, the support is calculated at the prices that are over two-decade old.
India is asking for a change in the base year (1986-88) for calculating the food subsidies. India wants a change taking into account inflation and currency fluctuation.New Delhi feels that the developed nations may not be interested in addressing food subsidy issue once the trade facilitation agreement was signed. In such an event, the Indian government would have a limited room in feeding hundreds of millions of poor in the country.
Even while seeking to break the deadlock, US secretary of state John Kerry warned India it stood to lose if it refused to budge.“Right now India has a four-year window where it’s been given a safe harbor where nothing happens,” he told NDTV.“If they don’t sign up and be part of the agreement, they will lose that and then (they will) be out of line or out of the compliance with the WTO,” he said.
Meanwhile, Indian commerce secretary Rajeev Kher claimed that India has suggested “a way of action” to break the impasse. A government source, however, said that India has not changed its position in Geneva.“The Indian government wants clear intent on its food security issues. Whatever chan-ges India want should be clearly reflected in the new text,” the source said.
( Source : agencies )
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