India Continues to Oppose WTO Deal The Country's Tough Stance Could Scuttle
WTO Talks
<http://online.wsj.com/news/articles/SB10001424052702303722104579239260750323766#>
http://online.wsj.com/news/articles/SB10001424052702303722104579239260750323766
Ben Otto
Updated Dec. 5, 2013 3:15 a.m. ET
NUSA DUA, Indonesia—India on Thursday refused to back down in its
opposition to a proposed global trade deal, possibly dealing a death blow
to World Trade Organization talks that have meandered for years without a
conclusion.
Indian Trade Minister Anand Sharma said that India was committed to a
positive outcome at the four-day talks, which end Friday, but that "it is
better to have no agreement than a bad agreement."
Other nations, including the U.S., have stressed the need for negotiators
to agree on a scaled-down package of trade liberalization measures in Bali
or risk the WTO losing its significance as a forum for trade talks.
Enlarge Image
India's trade minister Anand Sharma is seen during a news conference at
the ninth World Trade Organization Ministerial Conference in Nusa Dua, on
the Indonesian resort island of Bali on Dec. 5, 2013. Reuters
The negotiations began 12 years ago in Doha, Qatar, and have been bogged
down in fights among the WTO's 159 members countries over the best path to
liberalize trade. Two years ago, negotiators dropped a more ambitious pact
to cut tariffs on goods and services to focus instead on less-contentious
measures, such as streamlining customs procedures.
But they have been unable to reach agreement even on this. India has led
the opposition, in part because it is angry over WTO rules that prevent it
from moving ahead with a massive food subsidy program. Negotiators had been
trying to get India on board by allowing it to break the rules for four
years before reducing the subsidies.
India's government, which faces an election next year, appears to be
rejecting that compromise.
Some trade negotiators said India's tough stance has lost it the support of
traditional allies in the developing world in recent weeks. But the WTO
operates on a consensus basis, meaning opposition by a single country can
scuttle a deal.
On Thursday, Mr. Sharma disputed that India was increasingly isolated,
saying it spoke for the "vast majority" of poor people around the world.
"We are not alone," he said, adding that in closed-door meetings this week
countries representing more than two-thirds of the world's population had
expressed support for India's position.
A number of negotiators in interviews disputed that statement, saying that
while a handful of countries have said they aren't satisfied with the
overall package, few had suggested they would vote against it. Negotiators
also said that if India were to drop its objections, those countries would
fall in line.
Some negotiators pointed to a statement by influential groupings of
least-developed countries and African countries last week in support of the
deal as a sign India was losing support.
The divide represents a stark departure from the collapse of WTO talks in
2008, when India rallied more than 100 countries to its side and against
Western interests.
India for years has positioned itself as the representative of poor
countries in talks. It has fought the industrialized world's attempts to
get better access for their goods in developing markets. It has called for
Western nations to end agricultural handouts. And it has fought for poorer
countries to be able to continue subsidizing their farmers.
Launched after the Sept. 11, 2001 attacks on the U.S., the Doha round was
billed as an a attempt to bring development to poor countries. But as
countries like China and Brazil have grown richer, nations like the U.S.
have called on them to open their markets to foreign goods.
India was a vocal opponent of this push. It also has clashed with
industrialized countries over its food subsidy program. India heavily
subsidizes its purchases from farmers and sells the goods to its hundreds
of millions of poor at below-market rates. It is planning to expand that
program substantially. Critics say the subsidies create excess production,
with some of the surplus entering the world market and distorting prices.
Many observers say that while getting the current pact through would save
the talks from crumbling, and could have significant economic impact, the
Doha round is likely to remain in trouble.
"This is the easy stuff," said one negotiator. "If we can't get through
this, there's no hope for things like" more divisive issues like
agriculture.
Governments are starting to shun the tortuous process of negotiating by
consensus under the WTO to forge smaller regional pacts. Europe and the
U.S. are negotiating a trade agreement, while a dozen Pacific Rim nations,
including the U.S., are working on a similar agreement.
U.S. Trade Representative Michael Froman will travel to Singapore this
weekend for further discussions on the Pacific Rim pact.
Mr. Froman, like dozens of ministers who spoke during an opening session
Wednesday, suggested Bali would be the last chance to conclude the WTO
trade talks, He said it "would deal a debilitating blow to the WTO as a
forum for multilateral negotiations" to leave the Indonesian island without
an agreement.
"And if that happens, the unfortunate truth is that the loss will be felt
most heavily by those members that can least afford it."
"It is the fate of the entire WTO that is at stake," said the European
Union's Trade Commissioner Karel De Gucht. "Both metaphorically and
physically, we have come too far to fail."
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