Rich nations resist India's WTO deal plan

NEW DELHI: The refusal by rich nations to move beyond giving a mere assurance to address India's concerns resulted in the collapse of WTO talks early on Friday morning (India time), but top government officials said there is still scope to close the deal thrashed out in Bali by the end of the year.

Questioning the claims made by some of the rich nations that India did not offer solutions, the officials said, WTO director general Roberto Azevedo contacted commerce and industry minister Nirmala Sitharaman last Sunday, two days after India's ambassador Anjali Prasad told members that the government had decided to link the final trade facilitation agreement to addressing India's concerns on food security.

On Monday afternoon, Azevedo sent a formal proposal, suggesting a month-by-month work programme to address India's concerns, which went beyond what he had suggested to Sitharaman in Sydney a few days earlier. Although it proposed a solution by December-end, it was "ambiguous" as it did not provide "substantive content to address the main issue", an officer said.

Two days later, India responded with two options but made it clear that a trade facilitation agreement was not possible before a permanent solution to the food problem. It dug out the four possible solutions that G-33, comprising developing countries, had proposed before the Bali ministerial. The first was to keep the subsidy paid to poor farmers for procurement outside the ambit of the formula. The second was to change the base year for subsidy calculation from 1986-88 to current market prices.

The third alternative was to index the 1986-88 price to current levels and the fourth was to have a permanent "peace clause" so that there was no challenge at WTO even if the limit was breached.

The second option was to agree to the trade facilitation pact with peace clause until a permanent solution is found. "We asked for this with the clear understanding that a solution had to be found by December 31," a senior officer explained, adding that a draft text of the new framework was also handed over to the WTO boss.

As the Thursday deadline neared, the US and others sought to put pressure on the government with secretary of state John Kerry raising the issue during his meetings in the capital on Thursday. The government was, however, had a clear strategy of negotiating in Geneva.