The WTO on Thursday said its 160 members had failed to agree a landmark global customs pact in a move the US said left the body on “uncertain new ground.”
“We have not been able to find a solution that would allow us to bridge the gap,” WTO Director-General Roberto Azevedo said in a statement after the passing of Thursday’s deadline for the deal.
A draft of the so-called trade facilitation agreement, which would streamline global customs procedures, was agreed at a Bali conference in December last year and was meant to be finalized last month.
However, rifts between members, particularly over demands from India that the WTO give the green light to the developing power’s stockpiling of food, had threatened to scuttle the long-sought deal.
Azevedo urged members “to reflect long and hard on the ramifications of this setback.”
Throughout Thursday Azevedo held talks with coordinators of regional groups within the WTO to try to find a way forward, but without success.
At the end of the evening he held brief closed-door talks with representatives of all 160 members before announcing that an agreement had not been reached.
India is refusing to ratify the deal, reportedly because it is unhappy with other trade negotiations over both food stocks and farm subsidies.
That obstacle has already sparked criticism from the EU and a group of 25 developed and emerging countries.
The US has warned that the blockage could threaten wider future talks on global trade — the so-called Doha round.
US Secretary of State John Kerry, on a visit to New Delhi, had earlier said he was hopeful that differences between India and much of the rest of the world could be resolved.
However, after Azevedo’s speech, US 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.
Trade diplomats had previously said they were reluctant to consider the idea of the all-but-India option, but the momentum behind the trade facilitation deal means it might be hard to stop.
Many countries, including China and Brazil, have already notified the WTO of steps they plan to take to implement the customs accord immediately.
Other nations have begun bringing the rules into domestic law, and the WTO has set up a funding mechanism to assist. However, Azevedo said he feared that while major economies had options open to them, the poorest would be left behind.
“If the system fails to function properly then the smallest nations will be the biggest losers,” Azevedo said. “It would be a tragic outcome for those economies — and therefore a tragic outcome for us all.”
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