WASHINGTON, July 27, 2014 – U.S. Trade Negotiator Michael Froman says India’s refusal to support a package of agreements including the so-called Trade Facilitation Agreement (TFA) has brought the World Trade Organization “to the brink of crisis.”
The U.S. and other developed countries say India is retreating from an accord signed at Bali in December 2013 which included TFA, which would reduce red tape in international trade, and an agreement on food stockpiling. India has until July 31 to sign on to the accord.
“We are extremely discouraged that a small handful of members in this organization are ready to walk away from their commitments at Bali, to kill the Bali agreement,” Deputy USTR Michael Punke said July 24 in Geneva, where the WTO General Council is meeting.
“We still have a few days.” Punke said. “But while the deadline is fixed and firm, the real issue isn’t time. The issue is, will all WTO members keep their commitments? Will all WTO members live by their word? In the next few days we’ll find out. The whole world is watching.”
India does not appear to be backing down. In a strongly worded statement on Friday, India said it will not agree to any accord on trade facilitation unless food security issue is also taken up. The agreement would limit a government practice of buying massive amounts of grain from farmers then distributing the grain at low prices to the poor. India's food security law runs the risk of violating WTO rules that prescribe a limit on farm subsidies at 10 percent of output.
In Washington last week, Froman failure to get an agreement on TFA “threatens to deal a serious blow to the credibility of the multilateral trading system and to set back the development needs of many countries around the world.” He said the U.S. will be consulting with other WTO members on how to proceed.
On Saturday, in two separate statements, the European Union and an Australia-led group of more than two dozen countries asked India not to veto the TFA.
"A decision to step away would be in no one's interest. It would seriously undermine the ability of the WTO to deliver for the future," the group led by Australia warned.
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