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US talks compromise to end WTO deadlock

business Updated: Aug 01, 2014 08:46 IST
HT Correspondent
HT Correspondent
Hindustan Times
John Kerry

US secretary of state John Kerry on Thursday said he was hopeful that a compromise in a global trade deal to ease customs rules incorporating India’s concerns over the food security was still possible, even as hectic negotiations were underway in Geneva to meet the earlier agreed deadline of July 31.

“We are obviously encouraging our friends in India to try to find a path here where there is a compromise that meets both needs, and we think that’s achievable. We hope that it’s achievable,” Kerry told reporters after talks with Indian leaders as part of an annual strategic dialogue.

Last week India told the World Trade Organisation (WTO) that it will only back a worldwide reform of customs rules—the so-called trade facilitation agreement (TFA) — if its demands on rules for government-driven food procurement and welfare schemes are implemented in the same timeframe.

“Our feeling obviously is that the agreement that was reached in Bali is an agreement that, importantly, can provide for food security for India,” Kerry said.

“We do not dismiss the concerns India has about (the) large number of poor people who require some sort of food assurance,” Kerry said.

External affairs minister Sushma Swaraj said: “Talks are underway in Geneva. Let’s wait for the outcome.”

WTO director-general Roberto Azevêdo said in Geneva he remained hopeful a compromise could be found.

India has made it clear that it will continue to oppose the TFA’s adoption if the deal doesn’t come bundled with a permanent solution that will allow unhindered roll-out of welfare schemes such as the food security programme.

At the Bali Ministerial in December last year, the WTO member countries had agreed to make trade easier, faster and cheaper by making systems transparent and reducing red tape by agreeing to adopt the TFA from July 31.

New Delhi is of the view that without a permanent solution on food subsidies, India’s public stockholding programmes such as buffer stock of foodgrains will be hampered by the current ceiling on subsidy to farmers.

Existing rules cap the value of food subsidies at 10% of the value of production. But the way the support is calculated at prices of more than two decades earlier means many countries would find it difficult to stay within the limit potentially attracting strong penalties from the trade body.

This will affect India’s food security programme and food grain procurement through the minimum support prices (MSP), government sources said.

“Our stand remains the same,” commerce minister Nirmala Sitharaman told reporters after meeting US commerce secretary Penny Pritzker on Thursday.

Pritzker had said on Wednesday the US is “very disappointed that India has taken a step back from its agreements that it made in December (last) at the WTO.”

Indian commerce secretary Rajeev Kher said India has suggested “a way of action” to break the impasse.

(With inputs from Noopur Tiwari in Paris)