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India resists mounting pressure in WTO impasse

India on Thursday shrugged off mounting pressure to compromise in a global impasse over food security that has cast the future of the World Trade Organisation into doubt.

business Updated: Dec 05, 2013 13:24 IST
food security bill,food security,World Trade Organisation

India on Thursday shrugged off mounting pressure to compromise in a global impasse over food security that has cast the future of the World Trade Organisation (WTO) into doubt.

New Delhi's insistence that it be allowed to stockpile and subsidise grain for its millions of hungry poor has emerged as a major stumbling block at a WTO conference of trade ministers in Bali.

The WTO has warned that failure to reach a compromise on that and other issues could be a death blow to the body's 12-year-old effort to remove trade barriers, which is at a stalemate.

"This is a fundamental issue. We will never compromise," Indian commerce and industry minister Anand Sharma told reporters at the conference venue on the Indonesian resort island.

The WTO launched its main "Doha Round" of talks in Qatar in 2001, aiming to create an open trading environment and rules that are fair to both rich and poor countries.

But protectionist disputes, particularly between the industrialised and developing worlds, have made progress elusive.

New WTO chief Roberto Azevedo of Brazil is pushing for an agreement in Bali on a more modest package touching on agricultural subsidies and other issues, hoping to buy time until Doha can be revived.

With the clock ticking on the four-day conference, which ends on Friday, diplomatic efforts have stepped up.

Indonesian trade minister Gita Wirjawan, chair of the talks, said he and Azevedo were seeking to broker a compromise between India and the United States.

Washington and some other trading nations are said to feel the Indian position violates WTO limits on subsidies and fear stockpiled grain could end up on global markets, skewing prices.

The crux of the impasse is New Delhi's demand that it be made exempt from any WTO challenges over the issue indefinitely, while the Bali package would limit the exemption period.

"This doesn't mean that this is a mission impossible," said Wirjawan, who has called for compromise in comments that appeared aimed at New Delhi.

Earlier on Thursday, EU Trade Commissioner Karel De Gucht hinted at possible movement behind closed doors.

"There has been a development in the Indian position but it is difficult to say what that could mean," he said.

India's ruling Congress Party is facing tough elections next year, but Sharma said domestic politics were not a factor in its WTO stance.

He framed the issue as a divide between industrialised countries and a developing world that he said viewed WTO rules as favouring rich nations.

"India speaks for the vast majority of people in the developing countries and the poor countries. India is not alone," he said.

However Mark Kennedy, who leads the graduate school of political management at George Washington University, said developing countries did not "appear to be rallying to India's cry".

"It comes off more as a domestic political issue for India than a true commitment to be a leader for the developing world," added Kennedy, who has also advised the US government on trade issues.

Trade ministers have issued stark warnings that a failure to close gaps in Bali would fatally wound the WTO's waning world influence.

Azevedo has raised an alarm over alternative regional pacts between major trading nations, such as the 12-country Trans-Pacific Partnership pushed by Washington.

He said a trend in that direction would have "tragic" consequences for countless poor in developing countries around the world that are struggling to compete in the global marketplace.

First Published: Dec 05, 2013 13:15 IST