India brainstorms on WTO impasse

There's an impasse over signing an agreement aimed at easing global customs rule at the WTO

The government on Monday held a brainstorming session on the position it will take on the impasse over signing an agreement aimed at easing global Customs rule at the World Trade Organization (WTO), as developed countries continued to put pressure on it to relent.

The meeting was held by Prime Minister Narendra Modi with officials of the ministry of commerce and industry. Though there was no official statement, officials told Business Standard the government was planning to chalk out a strategy in the event some member countries decided to sign the pact, Trade Facilitation Agreement, separately, keeping India out.

“This cannot be allowed. This is against WTO rules,” said a senior commerce department official, when asked if such an option can be worked out.

India had made two demands at the WTO. It has asked for a permanent solution to the issue of public stockholding for food security and not a restricted period of four years, as was originally decided during the ministerial meeting in Bali, Indonesia, last year — called the Bali package. India also asked for the base period to be shifted to a more recent period, taking into account the rise in inflation, for calculating agricultural subsidies. Now, 1986-88 is used for the calculation.

Commerce ministry officials said they were hopeful a possible solution could be worked out by the time the next General Council, the highest decision making body, meets in December.

European Union Trade Commissioner Karel de Gucht is also believed to have urged Commerce and Industry Minister Nirmala Sitharaman to relent.

Addressing an informal meeting of the heads of delegation last week, WTO Director-General Roberto Azevêdo laid out three options to break the deadlock over TFA, which has the potential to induce $1 trillion into the global economy and generate 20 million jobs. “Clearly some members are already talking about alternative ways to take the TFA forward,” Azevêdo said, even as he stated that one of the ways could be to “seek implementation of the TFA as a plurilateral agreement outside the WTO.”

In such a scenario, he had said, all that agreed as part of the Bali package and the related work would collapse. “There is a whole spectrum of possible ways that this could happen. It could be taken up as a traditional, stand-alone plurilateral agreement. That’s one end of the spectrum. This option could leave the other Bali decisions and the post-Bali work programme behind,” he said.