India yesterday rejected a proposed WTO package, casting a cloud over a high-stakes conference tasked with reviving the organization’s faltering efforts to liberalize global commerce.
The package, which New Delhi fears could endanger its efforts to subsidize food in the huge nation, “cannot be accepted,” Indian Minister of Commerce Anand Sharma said.
“Agriculture sustains millions of subsistence farmers. Their interests must be secured. Food security is essential for 4 billion people of the world,” he told his counterparts in Bali, Indonesia.
“Yes, we have rejected it,” he later told reporters, calling it a “final decision.”
His comments appeared to torpedo WTO Director-General Roberto Azevedo’s hopes that delegates can agree on a modest package of measures to keep alive the multilateral organization’s stumbling 12-year-old drive to slash trade barriers.
“I am an optimist by nature, but today I must admit I am in a somewhat sombre mood,” EU Commissioner for Trade Karel de Gucht told reporters.
One by one, delegates to the four-day conference warned that Bali could be the last chance to rescue the WTO’s vision of an open trading environment fair to both rich and poor countries.
“Leaving Bali this week without an agreement would deal a debilitating blow to the WTO as a forum for multilateral negotiations,” US Trade Representative Michael Froman said. “And if that happens, the unfortunate truth is that the loss would be felt most heavily by those members who can least afford it.”
The WTO launched the “Doha Round” of talks in Qatar in 2001 seeking to overhaul the world trading system by setting a global framework of rules and tearing down barriers.
Yet protectionist disputes between rich and poor countries, coupled with the WTO’s insistence that an accord be unanimous, have made progress frustratingly elusive.
Meanwhile, alternative regional pacts between major trading nations including the 12-nation Trans-Pacific Partnership pushed by Washington have emerged, threatening the WTO with obsolescence.
Azevedo has said it would be “tragic” if such arrangements carry the day as they cannot protect the interests of the world’s poorest countries — a key WTO objective.
Chances for success in Bali have increasingly centered on India’s position on food security.
India passed a landmark National Food Security Act in August that will expand the buying of grain from farmers at subsidized rates and sell it to consumers at even more reduced prices.
Facing tough elections next year and pressure from powerful farm unions and opposition parties, the ruling Indian National Congress Party has dug in its heels.
It fears that a WTO rule limiting subsidies to no more than 10 percent of agricultural production could threaten its efforts to provide cheap food for its hundreds of millions of poor citizens.
The Bali package would exempt India from any WTO challenges on subsidies for about four years, but New Delhi wants a blanket exemption until a permanent solution can be negotiated.
Pulling back from the Doha Round’s lofty goals, the Bali package being considered this week focuses on a handful of specific issues including agriculture, simplifying customs procedures and measures to help the least-developed countries.
The WTO hopes that a modest deal in those areas can keep Doha on life-support for a later push.
“Right now, I fear the opposite is true. The storm clouds of failure are right on us. Ladies and gentlemen, this is crunch time for the WTO,” De Gucht said.
Still, ministers stressed that hope for an eleventh-hour deal in Bali still flickered and delegation sources indicated that diplomacy was gearing up behind closed doors.
Azevedo, Brazil’s former envoy to the WTO who took over as director-general in September from France’s Pascal Lamy, declined to address Sharma’s statement.
“Right now, no comments on anything. We are working,” he said.