India warns US over food stockpiling as WTO deal goes down to wire

By John Chalmers

NEW DELHI (Reuters) - India has told the United States it must give ground in negotiations over food stockpiling to secure a global trade deal next month, a step widely seen as vital for the credibility of the World Trade Organization.

In a letter to U.S. Trade Representative Michael Froman, India's Commerce Minister Anand Sharma emphasised the "social significance" of allowing a change in the WTO rules to let poor countries stockpile subsidised food.

"As I had explained to you, Food Security is crucial for large developing countries like India with hundreds of millions of people subsisting below the poverty line," Sharma wrote, according to excerpts made available to Reuters.

"It must also be juxtaposed with the fact that the agrarian economy of India is driven by subsistence and marginal farmers unlike the large contract farmers in the developed world. You will appreciate that protecting the interests of farmers and vulnerable sections of society is a key political imperative for a country like India."

India led 46 developing countries in proposing the reform a year ago, suggesting that poorer countries should be exempt from limits on subsidies when they stockpile food to support low-income or resource-poor farmers.

The proposal has been one of the main sticking points in a package of trade reforms that the WTO wants its 159 member countries to agree on at a summit in Bali next month.

WTO chief Roberto Azevedo has been pushing trade ambassadors in a last-ditch bid to put the deal together and warned them on Tuesday not to keep negotiating until the last moment, while vowing to push them to the limit.

"We have to close this in Geneva," he said. "It is all or nothing now. We must tie the package up once and for all in the next few days."

Azevedo said he had a positive feeling about the stockpiling element of the talks and "a sense that both sides are working in good faith with a genuine desire to find a solution".

But Sharma said an interim solution under discussion "falls well short of our requirements and would place onerous conditions which would restrict its use significantly".

However, he was more positive on the biggest component of the proposed Bali deal, known as "trade facilitation", an effort to standardise and simplify customs procedures for all WTO members.

Anand said he was reassured that there was a broad meeting of minds on the issue, and suggested India should be given credit for narrowing the negotiating gaps.

"You will appreciate that over the last few weeks Indian negotiators have played a very constructive role in line with our commitment for a positive outcome to ensure that progress is registered on this front," he told Froman.

In his speech on Tuesday, Azevedo said trade facilitation, which is expected to add hundreds of billions of dollars to the world economy, had been partially agreed but other parts still required some "tough calls" by negotiators. (Writing by Tom Miles in Geneva; Editing by Hugh Lawson)