International pressure on India to sign WTO trade agreement

Despite assurance from many nations on food security issue, India sticks to its guns

India has come under international pressure to sign on the protocol of amendment for the World Trade Organization’s (WTO’s) trade facilitation agreement (TFA) and help convert it into a legal document before the July 31 deadline.

The country, though, is sticking to its stand that it will not sign the agreement till it gets assurance that the food security issue, concerning stockholding of food grains and subsidies under WTO’s Agreement on Agriculture, will be negotiated by the 159 member nations. This is even as India has received an assurance from US, Brazil, China, Africa and the G-33 group of developing countries that food security will be discussed.

Until the end of last week, India had not spelt out its stance on Post-Bali Work programme, officials involved in the negotiations at WTO’s Geneva headquarters told Business Standard.

“India did not even clearly spell out what will be it’s position... It was only last week that it came out with a half-baked proposal. Ever since Bali happened, India has been silent on the Bali package, which is waiting for a guidance from New Delhi. India has been saying for months it cannot debate on these issues, as its new government has not yet taken any position on the Bali talks,” said a senior trade negotiator, asking not to be named.

The trade negotiator added India had this time been deserted by the BRICS, G-20, G-33 and the African group, all of which had agreed to adhere to the July 31 deadline for the trade facilitation agreement. The pact is to come into force from July 2015. The official also warned if India lost the opportunity on the agreement now, it would be “very difficult” to get everyone back on the table to talk on food security.

According to sources, Commerce & Industry Minister Nirmala Sitharaman held separate meetings with WTO Director-General Roberto Azevêdo, US Trade Representative Michael Froman and other senior officials, on the sidelines of the G-20 meeting in Sydney last week. All of them assured her food security would be negotiated as soon as work on the trade facilitation agreement was over.

“Not a single country, including the US and other developed countries, signalled in any way that there was a movement away from the promises made to India in Bali,” said another official involved in the talks.

According to a ‘Summary of Discussion’ circulated to G-20 participants internally, which has not been made public, all members, including the developed world, have agreed that the trade pact was “not the only Bali outcome, and G-20 ministers are committed to working constructively on all elements of the Bali package of outcomes”, explicitly saying issues concerning public stockholding for food security purposes will be discussed.

And, that’s not all. Apparently, India was also assured by the US, twice, that it was “committed to what was agreed in Bali, with all the specific deadlines, including on the issue of trade facilitation.” According to reliable sources, US has even assured India that it will start working towards food security issues once the work on the trade facilitation agreement gets over, as the deadline to find a permanent solution to the food security issue is 2017.

However, it seems, India has not responded to either of the US authorities’ communications clearly spelling out the US’ approach on food security. In an internal communiqué on the Post-Bali Work Programme to the WTO members, the US even suggested compiling a report on food security and how it should be negotiated. At a press conference concluding the G-20 trade ministers’ meeting, Australian Trade Minister Andrew Robb said there was a “strong resolution” that India’s concerns on food security should be addressed.

All eyes are now on what the Cabinet, chaired by Prime Minister Narendra Modi, will decide on the issue on Wednesday. It is unlikely to make its stance very clear but might show its intent of supporting TFA, provided talks on food security also moves on. Besides, the WTO Trade Negotiating Committee will meet in Geneva on July 24 to build a final consensus among all members.

Industry body Ficci, meanwhile, has come out in open support of the trade facilitation agreement and urged the government to sign the pact, which will help reduce transaction costs across international borders.