India Threatens to Block WTO Deal.

NEW DELHI—India is threatening to unravel recent progress in global trade talks by blocking a World Trade Organization agreement reached last year in Bali, Indonesia, if it isn't given more freedom to stockpile food.

Indian Trade Minister Nirmala Sitharaman plans to raise India's demands for the WTO at a meeting of trade officials of the Group of 20 industrial and developing nations in Australia on Saturday, Indian officials said Thursday.

Members of the WTO are trying to ratify the deal struck in December, which would standardize and streamline customs procedures around the globe.

To take effect, the new rules, which would likely take years to implement once ratified, must first be approved by all 160 WTO member nations. The trade initiative has to be ratified by the end of this month and sets mid-2015 as a deadline for formal implementation.

"India will find it difficult to join the consensus" needed to pass the WTO agreement, until there is progress on the demands from India and other developing countries, India's trade ministry said in a submission to the WTO earlier this month.

"In round after round, developing countries have been called upon to concede more with little being offered in return," the ministry said.

Deputy U.S. Trade Representative Michael Punke said on Wednesday in Washington that India was sending mixed signals but that the U.S. was looking to address the issue at the G-20 meeting.

In June, shortly after India's new government, led by the Bharatiya Janata Party, took office, Ms. Sitharaman told the The Wall Street Journal that she wanted to use India's growing international clout to push its agenda at the WTO.

"My approach certainly will be, with the guidance of the prime minister, to be sure that our national interest has to be emphasized," she said.

The Bali agreement on so-called trade-facilitation measures was supposed to be an easy-to-approve package of policies. Failure to pass it could further affect waning momentum in global trade talks.

The WTO scaled back goals set at the start of the Doha rounds of talks, which began in 2001, because it couldn't reach a consensus on how to move forward.

While not as nearly ambitious as the Doha goals, the agreement is still expected to add billions of dollars to the $65 trillion global economy by making it easier for goods to pass through customs.

India's problem is with the WTO rules about food stockpiling. The WTO has a formula to define how much money a country can spend creating a food stockpile for security and to support farmers.

Indian trade ministry officials said India needs better assurance from the trade organization that it will be allowed to go beyond those limits.

Because India has so many consumers and farmers that live on or below the poverty line, the country wants to be able to put aside more food, mostly grain, for those in need.

During the Bali discussions, India had agreed to the trade-facilitation package with the understanding that its demands would be met, but officials said it has since felt ignored in the WTO discussions.

"Not even a single substantive meeting has happened in the past seven months to discuss (food) stock-holding issue," said one senior trade ministry official, who didn't want to be named. "Can we give away our rights to buy food grains from poor and marginal farmers? No."

India is hoping that the food prices used to calculate how much each country is allowed to spend of food stockpiles will be revised higher to reflect inflation, the official said.

Even if India continues to play hardball, it is likely to come back from the brink and let the trade-facilitation package pass once it is reassured that its demands will be met, said Ajay Sahai, director general of the Federation of Indian Export Organizations, a trade lobby group.

"I think good sense should prevail, they should agree to India's proposal and should not see trade-facilitation in isolation," he said. "We are talking about protecting the livelihood of small and marginal farmers. We are talking about consumers who can't afford the price of the market driven foods. So, I think India has every right to dissent."

Source : online.wsj.com