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Disappointment, uncertainty after India blocks WTO trade deal

August 01, 2014 08:57 IST

Disappointment, uncertainty after India blocks WTO trade deal

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Matt Siegel and Tom Miles

Several member states of the World Trade Organisation voiced frustration after India's demands for concessions on agricultural stockpiling led to the collapse of the first major global trade reform pact in two decades.

WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" in Bali,Indonesia, last December, but were unable to overcome last minute Indian objections and get it into the WTO rule book by the July 31 deadline.

"We have not been able to find a solution that would allow us to bridge that gap," WTO Director-General Roberto Azevedo told trade diplomats in Geneva, just two hours before the final deadline for a deal lapsed at midnight (2200 GMT Thursday).

Most diplomats had expected the pact to be rubber-stamped this week, marking a unique success in the WTO's 19-year history which according to some estimates would add $1 trillion and 21 million jobs to the world economy.

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Photographs: Reuters

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Disappointment, uncertainty after India blocks WTO trade deal

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They were shocked when India unveiled its veto and the eleventh-hour failure drew strong criticism, as well as rumblings about the future of the organisation and the multilateral system it underpins.

"Australia is deeply disappointed that it has not been possible to meet the deadline. This failure is a great blow to the confidence revived in Bali that the WTO can deliver negotiated outcomes," Australian Trade MinisterAndrew Robb said on Friday.

"There are no winners from this outcome - least of all those in developing countries which would see the biggest gains."

But the momentum on trade facilitation reforms means it may be hard to stop and some nations have already discussed a plan to exclude India from the agreement and push ahead regardless.

An Australian trade official involved in the talks, who requested anonymity to speak more candidly, said officials were exhausted with the process and that there was already discussion about major reforms at the WTO and theDoha Round of trade negotiations, which began in 2001.

"Some see it as a final trigger for ending Doha and pressing ahead with plurilateral reform, leave behind those that don't want to come along," he said.

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Photographs: Reuters

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Disappointment, uncertainty after India blocks WTO trade deal

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Let Those Who Want To Do It, Do It

India had 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.

India's new nationalist government has insisted that a permanent agreement on its subsidised food stockpiling must be in place at the same time as the trade facilitation deal, well ahead of a 2017 target set last December inBali.

After Azevedo's speech, U.S. Ambassador to the WTO Michael Punke was downbeat.

"We're obviously sad and disappointed that a very small handful of countries were unwilling to keep their commitments from the December conference in Bali, and we agree with the Director-General that that action has put this institution on very uncertain new ground," Punke told reporters.


Photographs: Reuters

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