India may be the deciding factor in whether the World Trade Organization (WTO) retains its credibility and completes a trillion-dollar trade deal which has been disrupted this week, diplomats have stated.
Talks centred on pushing a trade reform that may add over USD 900 billion to the world economy and launch around 21 million jobs.
American Ambassador Michael Punke has noted that at 10 p.m. on Sunday, things had seemed hopeful, and it was expected that the WTO would create the first global trade deal in near 20-year history.
But last-minute problems arose that halted any further progress.
The WTO Head Roberto Azevedo stated members “stopped making the tough political calls” – thus preventing decisions from being reached.
“We will fail not only the WTO and multilateralism,” he noted.
“We will also fail our constituencies at large, the business community and, above all, the most vulnerable among us.”
His comments came after a meeting in Geneva where WTO members could not agree on a document to be presented in Bali, Indonesia, to trade ministers later in the year.
“Not a single human being living in poverty anywhere in the world will be better off if we fail in Bali,” he added.
Among the issues being discussed by the WTO’s 159 member countries were new rules centering on streamlining customs procedures to facilitate faster trade around the world.
Officials also wanted to create more harmony between trading blocs by facilitating far-reaching regulations.
Yet another key area of discussion was on agriculture, and specifically the sustainability of food security programmes.
One such programme is being led by the Indian government – which is now being cited as one of the main stumbling blocks for the organisation.
There is much volatility with regards to farming and food in countries such as India, making food price inflation a major issue in the country.
India therefore wants to subsidise in excess of the 10% total rate that’s allowed under the WTO.
This caused friction amongst other members; with several diplomats, after being asked which nation was to blame for the derailing, pointing the finger at India.
Diplomats noted they were unsure whether India – and the other holdouts including Cuba and Venezuela – desired more concessions, wanted to break the deal, or were paving the way for their
Ministers to make further demands in Bali.