Prime Minister Narendra Modi led the fight-back, telling visiting US Secretary of State John Kerry that the developed world should understand India's position. Modi "emphasised the need for developed countries to understand the challenges of poverty in developing countries and their governments' responsibilities in addressing them, when discussions take place in international forums", the Prime Minister's Office said in a statement after the meeting.
Efforts aimed at brokering a truce failed late on Thursday, prompting WTO Director-General Roberto Azevedo to express disappointment, mirroring the sentiment of much of the rest of the world. "We have not been able to find a solution that would allow us to bridge the gap," he told diplomats with the clock running out on the July 31 deadline, urging members "to reflect long and hard on the ramifications of this setback".
Officials said India would take up the agenda again after the WTO resumes work in September following the summer break, reiterating that the country was not opposed to the trade facilitation agreement that many claim could add $1 trillion to global GDP and create 21 million new jobs.
"After the one-month break, we will resume talks in September. We are prepared to engage from day one onwards," said a senior government official. "There is no question of the Bali deal being off."
Committed to Trade Deal, says India
"Every two years there is a ministerial in WTO. The general council has not undone the decision of the Bali ministerial," said the government official.
The US said India's image could take a knock while others threatened to go ahead without India. "Failure to sign the trade facilitation agreement sent a confusing signal and undermined the very image Prime Minister (Narendra) Modi is trying to send about India," a US State Department official told reporters after Kerry's meeting with him. The WTO general council had to rubber stamp by July 31 a protocol for trade facilitation reached at the Bali ministerial in December 2013.
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The trade facilitation agreement seeks to speed up global trade by simplifying customs procedures and cutting red tape. "We are 100% committed to trade facilitation. The deal has not broken," said the official. India sought implementation of the complete Bali package that includes the issue of public stockholding for food security purposes, proposing a December 31 deadline to stitch together a comprehensive package addressing all elements.
India regards the public stockholding issue as critical as it risks action under the WTO agreement on agriculture that limits farm support at 10% of the value of produce based on international prices that prevailed in 1986-88.
Many countries have accused India of turning its back on the Bali agreement and reopening negotiations, a charge officials dismissed. "In 2005, many said that Doha was on the brink of collapse. In 2008, they said the world will collapse if a Doha deal wasn't done, but it was the good sense of members that brought us back to the table," said the official cited above. "Pushing a date from July 31 to December is not bringing the heavens down. Too much emphasis is being made on the whole thing. Our commitment has not changed."
India's position caught much of the rest of the world by surprise as the country has always been a champion of world trade reform rather than blocs doing deals with each other, besides which the Modi government is avowedly pro-business. It was also isolated — only Cuba, Venezuela and Bolivia supported India's stand.
"On the one side we have the firm conviction, shared by many, that the decisions that ministers reached in Bali cannot be changed or amended in any way — and that those decisions have to be fully respected," Azevedo said. "And on the other side of the debate we have some who believe that those decisions leave unresolved concerns that need to be addressed in ways that, in the view of others, change the balance of what was agreed in Bali," he said, adding that the gap could not be bridged. He said the stalemate had significant implications. Azevedo indicated there had been some progress but not enough. India had on Thursday offered a new solution within the framework of its broader suggestion, the details of which were not available. "We got closer — significantly closer — but not quite there," Azevedo said at an informal meeting of the trade negotiations committee late Thursday night, adding that the "future of the multilateral trading system" was in their hands.
Even as talks collapsed, some countries deliberated on continuing with the proposal without India, but the suggestion was opposed. "India is the second-biggest country by population, a vital part of the world economy and will become even more important. The idea of excluding India is ridiculous," New Zealand Minister of Overseas Trade Tim Groser told Reuters.
Experts said India should use its rising economic clout to effectively put forward its views and seek a solution soon. "Being an experienced negotiator from the GATT (General Agreement on Tariffs & Trade) days and having known these tricks of the developed countries of all talk and no action on ground, India has pushed for progress to commence on finding a permanent solution well before the WTO ministerial in 2017 rather than leaving it to the last minute," said Pradeep S Mehta, secretary-general, CUTS International, a consumer rights group.
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