REPUBLIKA.CO.ID, NEW DELHI/SYDNEY - US Secretary of State John Kerry told Prime Minister Narendra Modi on Friday that India's refusal to sign a global trade deal sent the wrong signal, and he urged New Delhi to work to resolve the row as soon as possible.
A World Trade Organization pact to ease worldwide customs rules collapsed late on Thursday over India's demands for concessions on agricultural stockpiling. 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 subsidized food stockpiling must be in place at the same time as the trade facilitation deal, well ahead of a 2017 target set in Bali last year.
"Failure to sign the Trade Facilitation Agreement sent a confusing signal and undermined the very image Prime Minister Modi is trying to send about India," a US State Department official told reporters after Kerry's meeting with Modi.
Kerry was in New Delhi as part of an annual strategic dialogue to revitalize ties and lay the ground for a visit by Modi to Washington in December. The official said the meeting was "strong and positive" despite the breakdown at the trade talks in Geneva.
Several WTO member states voiced frustration after India's demands 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 a 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).
Disappointment
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 USD and 21 million jobs to the world economy.
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 organization 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 Minister Andrew Robb said on Friday. "There are no winners from this outcome – least of all those in developing countries which would see the biggest gains."
Kerry held out hope that there was a way forward that both addressed India's concerns about its food security program as well as advance global trade liberalisation.
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