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Tough Indian stance stalling trade pact

Efforts to assuage Indian concerns about a landmark global trade pact appear to have failed, sources involved in the discussions said on Monday, setting off a frantic rush to win its support before a Thursday deadline.

India is the most prominent of a group of developing nations angry with rich countries for failing to address their concerns about a deal on trade facilitation struck by World Trade Organisation member states in Bali, Indonesia, last year.

Proponents believe the deal could add $1 trillion to global gross domestic product and 21 million jobs by slashing red tape and streamlining customs, eliminating delays at the border that can often cost more than tariffs themselves.

A failure could prove disastrous for the moribund WTO and the system of global free trade deals it underpins.

As late as Sunday, hopes were high that publicly addressing Indian concerns during a G20 Trade Ministers meeting in Sydney this past weekend would give it a face-saving path towards reaffirming its assent before the July 31 deadline.

India stockpiles food for its poor, citing the need for food security, but doing so puts it at risk of breaking the rules of the WTO, which worries that the stockpiling of subsidised food can distort trade.

In Bali, WTO members agreed to give India a pass on its stockpiles until 2017, while negotiating a permanent solution.

Officials told Reuters that India had not supplied any clear indication of concessions it wanted, so attempts were made at the meeting to reassure it that its concerns, whatever they may be, were being heard.

“India clearly and forcefully expressed its concern that work proceed on all fronts, including food stockpiling, and received assurances that all G20 members are committed to the full implementation of all Bali agreements on the agreed timetables,” US Trade Representative Michael Froman told Reuters on Monday.

A confidential “Summary of Discussion” circulated to G20 participants by Australian Trade Minister Andrew Robb obtained by Reuters details what one official said was an example of India winning acknowledgment of its concerns.

The document notes that specific Indian concerns about the deal were raised by the members and pledges to work constructively this week to address those issues.

In principle, the WTO could pass the agreement on the basis of a qualified majority, but experts say that would be unprecedented and virtually impossible in an organisation that operates on consensus.