NEW DELHI: In the clearest articulation of India's position on the WTO standoff, from the highest level, PM Narendra Modi on Friday forcefully told visiting US secretary of state John Kerry that the first responsibility of his government was to the poorest people of the country.
This was after Kerry told Modi that India's position on the issue was sending confusing signals to the international community. Kerry's meeting with Modi saw the two leaders elaborating on their respective positions on the trade facilitation agreement (TFA) versus food subsidy in a forceful manner — even though officials insisted there was no spat — with Modi insisting that the interest of the poor was paramount.
"I am more concerned about the small Indian farmer, even though I believe the trade facilitation agreement is good for India," Modi said. The PM was responding to Kerry who told him the failure to get a WTO deal "undermines" Modi's message of India being open for business. The India-US strategic dialogue has been clouded by the Indian blockade of the trade facilitation agreement, as the talks failed in Geneva on Thursday night.
"The first responsibility of my government is to the poorest people of the country. While we don't oppose the agreement, we believe that the needs of those living on the margins of society, not just in India but elsewhere too, have to be addressed," Modi told Kerry in the meeting.
Modi also focused on security, telling Kerry he wanted to unite South Asia into an integrated economic community. But more important, Modi reaffirmed India's decision to continue assistance to Afghanistan.
A background briefing by senior US officials said Kerry "made the comment that while we understand India's food security concerns, the trade facilitation agreement is one that will bring tremendous benefit to emerging economies and particularly to the world's poor, and India's actions, therefore, are not in keeping with the prime minister's vision, and urged that India work with the US to quickly come up with next steps that would allow this to be brought back into focus, that it is not in India's interest for a solution to be made that does not include India".
At the meeting with Kerry, Modi was accompanied by his national security team, including foreign minister Sushma Swaraj, NSA Ajit Doval, foreign secretary Sujatha Singh and the Indian ambassador to the US.
The Indian side has not been particularly impressed by the quality of dialogue with the US. Apart from the exhausting laundry list of things that the two nations do, which many felt was completely unnecessary, there was a feeling on the Indian side that the US was not completely invested, which was reflected in Kerry's inattention during his meeting with Swaraj, where he kept leaving to take phone calls.
Understand our challenges, Modi tells US on India’s WTO veto
NEW DELHI: Against the backdrop of the US blaming India for the failure of WTO talks, Prime Minister Narendra Modi on Friday said developed countries should "understand" the challenges of poverty in developing nations and their governments' responsibilities to address them.
Modi conveyed the message to US secretary of state John Kerry and secretary of commerce Penny Pritzker when they called on him here.
"Prime Minister emphasized the need for developed countries to understand the challenges of poverty in developing countries and their governments' responsibilities in addressing them when discussions take place in international forums," a PMO statement said.
The meeting took place against the backdrop of India taking a tough stance on the issue of foodgrain holding and food subsidy at the WTO talks in Geneva last night after which the US blamed it for failure of the negotiations.
9 Reasons Why India Did Not Agree To US Proposal
India's tough diplomacy blocked a landmark world trade treaty late on Thursday, despite last-ditch talks to rescue what would have been the first global trade reform since the creation of the World Trade Organization 19 years ago.Trade diplomats in Geneva have said they are "flabbergasted", "astonished" and "dismayed" and described India's position as "hostage-taking" and "suicidal". Here are nine reasons why they say India's stance made no sense. (Source: Reuters)
1.
India has been a vocal backer of world trade reform. It has criticised the small clubs of countries, led by the United States and European Union, that lost patience with the slow pace of global reforms and started to discuss faster liberalising of trade in certain areas, such as services and information technology products. India is not in any of these groups. But Thursday's veto is likely to give them even more momentum as hope of a global trade pact, long in doubt, appears to be over.
2.
India's veto may be the beginning of the end for the WTO. Trade experts say that if the WTO's 20-year-old rulebook does not evolve, more and more trade will be governed by new regional agreements such as the Trans-Pacific Partnership, which will have their own rules and systems of resolving disputes. That could lead to a fragmented world of separate trade blocs.
3.
India's new government was widely seen as being pro-business. And yet it blocked a deal on "trade facilitation", a worldwide streamlining of customs rules that would cut container handling times, guarantee standard procedures for getting goods to and from their destinations and kill off vast amounts of paperwork at borders around the world. Some estimates said it would add $1 trillion to the world economy as well as 21 million jobs, 18 million of them in developing countries.
4.
Nobody else was negotiating. Thursday's meeting was simply supposed to formally adopt the final trade negotiation text into the WTO rulebook, following its agreement by ministers at a meeting in Bali last December. India's then trade minister Anand Sharma hailed the Bali deal as a landmark in the history of the WTO. "We were able to arrive at a balanced outcome which secures our supreme national interest," Sharma said at the time. India did not hint at any further objection until days before it wielded its veto, and even then it made no concrete demands until the WTO meeting to adopt the new rules was in progress.
5.
India did not object to the deal it vetoed. Its objections were unconnected to trade facilitation. It blocked the trade facilitation deal to try to get what it wanted on something else: food security.
6.
India had already got what it wanted on food security. At Bali, it forced a big concession from the United States and European Union, which initially strongly opposed its demands, but agreed that India could stockpile food at subsidised prices, reversing the trend of trying to reduce and remove trade-distorting food subsidies globally. The arrangement was temporary, but the WTO agreed to work towards a permanent solution within four years, by the end of 2017.
7.
India's demands reversed its previous position. India blocked the trade facilitation deal because it wanted the WTO to move to a permanent solution more quickly than the four-year timeline. But diplomats say that India was offered a two-year timeframe before Bali but it insisted on four.
8.
India's veto could put it in legal danger. As part of the Bali deal, India won a pledge that nobody would bring a trade dispute to challenge its food stockpiling programme, which is widely thought to have broken the WTO rules. However, diplomats say that Bali was a "package" of 10 agreements, and the only legally binding part was trade facilitation. If that fails, the package unravels, and India may lose its protection.
9.
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