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Business News/ Politics / Policy/  WTO deal: John Kerry sees room for compromise with India
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WTO deal: John Kerry sees room for compromise with India

Last-minute compromise would help rich nations, developing countries salvage trade facilitation agreement

John Kerry (left), accompanied by commerce secretary Penny Pritzker (centre), met Arun Jaitley (right) as part of a strategic dialogue that has been overshadowed by New Delhi’s refusal to sign a trade facilitation deal. Photo: PTIPremium
John Kerry (left), accompanied by commerce secretary Penny Pritzker (centre), met Arun Jaitley (right) as part of a strategic dialogue that has been overshadowed by New Delhi’s refusal to sign a trade facilitation deal. Photo: PTI

New Delhi: Members of the World Trade Organization (WTO) were striving on Thursday night for a last-minute compromise between rich nations and developing countries led by India that would help them salvage the first agreement hammered out by the multilateral forum since its formation almost 19 years ago.

A compromise seemed likely in Geneva as India and its supporters in the WTO appeared ready to shift to middle ground, relaxing their previously rigid stance on the thorny issue of food security that’s holding up the trade facilitation agreement (TFA).

The deadline for wrapping up the TFA and making it a part of the WTO rulebook is midnight of 31 July Geneva time. India is three-and-a-half hours ahead of Geneva time.

WTO spokesperson Keith Rockwell said in a statement on Thursday night that director general Roberto Azevêdo had convened an informal meeting of the heads of delegation at 9pm Geneva time.

“He will use this occasion to report to all delegations on the consultations he has undertaken since the General Council was suspended on 25 July. We expect that a statement will be made available to you after the meeting," he said.

India has demanded that the trade facilitation deal be accompanied by a parallel agreement giving it more leeway to subsidise and stockpile food than allowed by the WTO. The TFA, reached in Bali, Indonesia, in December, is meant to simplify customs procedures, facilitate the speedy release of goods from ports and cut transaction costs.

Backers of the deal say the TFA would add $1 trillion to the world economy and create millions of jobs.

At the heart of the problem is a WTO rule that caps subsidies to farmers in developing countries at 10% of the total value of agricultural production, based on 1986-88 prices. Developing countries complain that the base year is outdated and that they need to be given leeway to stock enough grains for the food security of millions of their poor.

Signs of a possible compromise emerged in New Delhi from a statement made by visiting US secretary of state John Kerry.

At a joint press conference with Indian foreign minister Sushma Swaraj, Kerry said the US did not dismiss India’s concerns on food security and that he was hoping for a compromise on the issue to address India’s concerns that would help break the stalemate at the WTO.

“We do not dismiss the concerns India has about large numbers of poor people who require some sort of food assurance at subsistence level. We believe there is a way to provide for that... So we are obviously encouraging our friends in India to try and find a path where there is a compromise...and we think that is achievable and we hope it’s achievable," Kerry said.

Indian commerce secretary Rajiv Kher said on Thursday that India had sent a fresh proposal to break the deadlock in Geneva “under the broad contours of its earlier stand".

A commerce ministry official said on condition of anonymity that if developed countries accept India’s proposal, there could be an end to the impasse before midnight.

“We have not proposed a way out. We have proposed something which is a way out. But it’s not easy for them to accept it because we are holding to our old stand. We are talking about substance, they are talking about process," the official said.

India’s permanent representative at the WTO, Anjali Prasad, on Friday put India’s position before the general council meeting of the WTO, holding that the Bali outcomes were negotiated as a package and must be concluded as such.

She sought a postponement of the 31 July deadline for implementation of the TFA till 31 December, for members to find a permanent solution to the food security issue.

The official cited above said India doesn’t believe missing the 31 July deadline is a deal-breaker. “It is like any other day which comes and goes in the Doha negotiating process. If they believe 31 July is a deal-breaker, they should agree to what we are saying," he added.

WTO spokesperson Rockwell said in a statement earlier in the day that although less than 12 hours remained for the deadline for approval of the TFA, director general Azevêdo remained hopeful a compromise could be found.

“Director general Azevêdo met this afternoon with coordinators from 17 groups representing a significant majority of WTO members. He updated them on the state of play regarding key issues in the Bali package of accords agreed last December in Indonesia. The director general said he was still working hard to find a solution that would be acceptable to all members. He advised group coordinators not to wander too far from the WTO’s headquarters because he could reconvene them again on very short notice," the spokesperson said.

Biswajit Dhar, professor of international trade at Jawaharlal Nehru University, said he does not see India compromising its position since the issue has become politically sensitive in India. “If a deal is reached in Geneva, it will be because developed countries have realised that not many countries are opposing India’s stand. The only possibility is a compromise on the part of the developed countries," he added.

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Published: 31 Jul 2014, 12:45 PM IST
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