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Yudhoyono to call Singh to save WTO

Publication Date : 05-12-2013

 

Indonesian President Susilo Bambang Yudhoyono is set to contact Indian Prime Minister Manmohan Singh over India’s stance during the ongoing World Trade Organization (WTO) negotiations in Bali, which could imperil the future of the trade body.

Yudhoyono’s call is expected to help ease India’s inflexibility and so agree on a deal that would result in the first global trade agreement since the WTO’s creation in 1995.

Presidential spokesman Teuku Faizasyah told The Jakarta Post on Wednesday that the President was planning to call Singh, but he did not provide further details.

“There is a plan for that [call],” Teuku said. “During a previous bilateral meeting with the prime minister, President Yudhoyono discussed the [WTO] ministerial meeting [in Bali].”

Sources at the State Palace said the call to Singh might be made on Thursday after Yudhoyono received reports from Trade Minister Gita Wirjawan, who is chairing the WTO meeting.

“It [the call] is being planned,” Gita confirmed.

The crux of the issue that is threatening negotiations is India’s program of stockpiling subsidised grain and rice to ensure cheap food for its people.

Trading partners fear that the programme contravenes WTO rules that limit farm subsidies, and there are concerns that India could misuse the policy to export food at cheaper prices, thus distorting the market.

Its food subsidies are also a key element in the government’s bid to win a third term in office, with Indians going to the polls next year.

During the WTO plenary session on Wednesday, India’s Commerce and Industry Minister, Anand Sharma, said that for India, food security was non-negotiable; hence, the importance of its grain stockpiling program.

“WTO rules need to be amended. The provision on due restraint cannot be accepted in its current form. It must remain in force till we reach a negotiated permanent solution and provide adequate protection from all kinds of challenges.”

On the sidelines of the session, Sharma said India had rejected the so-called “peace clause” proposed to help bridge the deadlock.

The clause basically stipulates that India and other developing countries will be given a maximum of four years to run their food security programmes without breaching WTO rules.

“I have not come here to make a deal. I have come here to secure the interests of the poor, as well as food security,” Sharma said.

As decisions at the WTO cannot be reached without consensus among all member countries, India’s stance could be “make or break” for the future of the global trade body.

In response to India’s position, Gita remained optimistic about achieving a deal. “We still have two days to go. Anything can happen,” he said. “We understand India’s concerns. Indonesia also needs a food security policy, but we are more open-minded as to the mechanism.”

Major developing countries, such as Brazil, China and South Africa, along with several least-developed countries (LDCs) had also united to push India to agree on a deal, according to several diplomats.

For these countries, the lack of a deal would ultimately jeopardise their trade and undermine development among poorer countries.

The secretary-general of India’s CUTS International and a member of the WTO’s High-Level Panel on the Future of Trade, Pradeep S. Mehta, said a no-deal would trigger “chaos” that could spill over into world trade.

“It may cause trade wars and increased protectionism,” he said. “The President’s call will help seal the deal. At least, it will exert some pressure on the prime minister to demand Minister Sharma delivers a deal in Bali.”

The Bali meeting is aimed at reviving the Doha Round of trade talks, agreed in 2001, for comprehensive liberalisation across a wide range of trade policies. As the finalisation of the deal got no closer, attempts were made last year to agree on the “low-hanging fruit” of the Doha Round deliverables that included trade facilitation, agricultural subsidies and packages for the development of LDCs.

 

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