By Peter Kenny and Eric Bellman
GENEVA--India effectively blocked an international agreement on easing trade regulations, saying the effort to promote global trade should be linked to food security.
At a meeting of the World Trade Organization in Geneva, India said it wouldn't support a "trade facilitation" agreement reached in the Indonesian resort city of Bali in December without a parallel agreement allowing countries to build supplies of food.
India's decision--which had support from Bolivia, Cuba and Venezuela--raises concerns that the WTO's 160 members won't be able to reach a consensus on the agreement that is designed to streamline and harmonize customs practices before the end ofthe month.
If no consensus is reached by July 31, the WTO's general council meeting will be adjourned, Keith Rockwell, a spokesman for the trade body, said. It is unclear what would happen after that.
Some economists forecast the agreement could lead to more than a trillion dollars in savings for WTO members.
India's actions prompted immediate criticism from other members, which accused it of undermining the international trading system.
"We are extremely discouraged that a small handful of members in this organization are ready to walk away from their commitments at Bali," U.S. Ambassador to the WTO Michael Punke said.
The Bali agreement was supposed to be a package of the "low-hanging-fruit" policies to which every country could theoretically easily agree on.
It was an attempt to jump-start the long-stalled Doha round of WTO talks that began in 2001 in the Qatari capital. The Doha round was an ambitious plan to open up more sectors of the global economy to more trade. But it has been stuck because the WTO depends on consensus for decisions and countries cannot agree on some of the controversial changes sought.
Indian trade officials said the South Asian nation was basically on board with the trade-facilitation measures but it needed the WTO to go further and start to recognize some of the unique issues in India and other developing countries.
India's problem relates to the WTO rules on food stockpiling and subsidizing. The WTO has a formula that defines how much money a country can spend creating a food stockpile for security and support for farmers. India wants the rules changed to allow it to go beyond the limits.
India has hundreds of millions of farmers and consumers who are on or just above the poverty line, and trade officials say the country needs more freedom to help its citizens.
During the Bali discussions, Indiaagreed to the trade-facilitation package with the understanding that its demands would be met.
Indian trade officials in New Delhi on Friday said the country was fine with continuing to negotiate beyond the July 31 deadline. The WTO has pushed deadlines in the past and could do it again, they said.
"Timelines are important but they are not sacrosanct" when the lives of so many poor people could be affected, said one trade official in India's capital who asked not to be named. "We have not blocked the deal."
Rajesh Roy contributed to this article.
Write to Eric Bellman at firstname.lastname@example.org
(END) Dow Jones Newswires
July 25, 2014 15:46 ET (19:46 GMT)
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