NEW DELHI--U.S. officials pressed India on Thursday to back away
from demands on farm subsidies that risked scuttling a global trade
agreement.
"There's been a real effort to try and find a common ground,
because going forward is really in the best interest of all the
members of the WTO, and particularly for India," U.S. Secretary of
Commerce Penny Pritzker said in an interview with Indian television
news channel NDTV.
She said she was "hopeful" that India would allow a World Trade
Organization deal to streamline customs operations to move ahead.
The WTO set Thursday as the deadline for all of the WTO's 160
member states to ratify the pact.
Failure to achieve a consensus would deal a severe blow to the
Geneva-based body's credibility, already tenuous after years of
stalled talks on tariff reductions. The trade-easing deal, which
member governments first approved in December in Bali, Indonesia,
was viewed as a way to create some momentum. But even here, talks
have come down to the wire.
As a raft of regional trade deals moves ahead, the WTO's ability
to act as a catalyst for global trade liberalization is in
doubt.
India has been insisting for weeks that it won't sign off on the
Bali pact unless the group comes to a faster accord on exempting
food-subsidy and stockpiling programs like India's from current WTO
rules that limit them.
The Bali meeting had produced a temporary truce on the issue:
WTO members agreed not to file complaints against India's food
subsidies for the time being, and said a permanent solution would
be found by 2017. India now says it wants speedier progress on
meeting its demands.
Ms. Pritzker is in India this week with Secretary of State John
Kerry and other U.S. officials for an annual strategic dialogue
with India.
"The bottom line is that we are very sensitive to, and we care
about, and we will work with India," Mr. Kerry told NDTV. "The key
is, don't lose the opportunity. Right now, India has a four-year
window where it's given a safe harbor. Nothing happens. If they
don't sign up and be part of the agreement, they will lose that and
then be either out of line or out of compliance with the WTO."
Other U.S. officials close to the WTO negotiations said they
were doubtful that compromise could be reached by the Thursday
deadline. After meeting with Ms. Pritzker Thursday afternoon,
Indian Commerce Minister Nirmala Sitharaman said Delhi's position
hadn't changed.
"We had agreed to the deal in December in good faith," a senior
Indian trade official said on condition of anonymity. "But things
haven't moved even an inch on the food-stockpiling issue or on
matters related to developing nations. This raises
apprehension."
To maintain government reserves and provide subsidized food to
needy households, India buys rice and wheat from farmers in
enormous quantities at above-market prices. That has put it at risk
of violating WTO rules capping subsidies that influence
agricultural prices and production. For developing countries, the
yearly ceiling for "trade-distorting" subsidies is 10% of the value
of agricultural production.
Economists have estimated that India has exceeded its cap in the
last few years as the size of its grain stockpiles--and hence the
prices it must pay to growers--has grown rapidly. But the WTO
doesn't have current data on the size and nature of Delhi's
agricultural subsidies. India hasn't submitted the requisite
documentation since 2011, when it reported the assistance it
provided to farmers between 1998 and 2004.
An Indian trade official confirmed that New Delhi had not
submitted its documents concerning more-recent years, but said it
would do so soon. There are "tens of nations" that are behind on
their WTO reporting, said the official, who didn't want to be
named. "What's the big deal?"
This isn't the first time WTO members have come to loggerheads
over agricultural policy and government protections for poor
farmers. The Doha Round of trade negotiations broke down in Geneva
in 2008 because the U.S. and India couldn't agree on developing
countries' rights to ramp up tariffs in the event of a surge in
agricultural imports.
The collapse in Geneva proved traumatic. WTO talks on major
issues were on hold for years.
December's talks in Bali also came close to falling apart. Then
as now, Indian negotiators portrayed the food-security standoff as
one between developing countries seeking to provide for their poor
and developed ones privileging freer trade over the lives of
millions of vulnerable people.
A coalition of developing countries initially backed India's
proposal to uncap farm subsidies provided as part of food-security
programs. But in this month's showdown, India was supported only by
Cuba, Bolivia and Venezuela.
Meanwhile, China, Thailand, Mexico and South Africa, among other
large emerging markets, have publicly criticized India's
intransigence. Pakistan--poorer per capita than India but also a
major rice-grower--has quizzed India repeatedly about its rice
subsidies at WTO meetings.
"The world has changed," says Lars Brink, an economist who
studies global agricultural policy. "India is now a much larger
player in international trade in agriculture than it was 10 years
ago--five years ago, even."
That means India's compliance with WTO rules and principles is
subject to greater scrutiny, including by many fellow developing
nations. "What India does in terms of policy settings matters to
other countries," Mr. Brink said. "Not necessarily in other large
countries, but in small and poor agriculture-producing
countries."
William Mauldin and Rajesh Roy contributed to this article.
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