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India lashes WTO, defends decision on failed trade deal
05 Aug, 2014 18:24:18
NEW DELHI, August 5, 2014 (AFP) - India on Tuesday defended its decision to scuttle a landmark worldwide trade deal, saying it needed to take a tough stand at the WTO to ensure the survival of its impoverished farmers.
Trade Minister Nirmala Sitharaman also lashed out at the World Trade Organization, accusing it of foot-dragging on negotiations to give the green light to India's stockpiling of food.

India's new right-wing government last week refused to ratify the long-sought global deal on streamlining customs rules, despite WTO members agreeing to the terms of the accord at a meeting in Bali last year.

The deal, the first global reform of trade in years which needs the agreement of the WTO's 160 members, would add $1 trillion and 21 million jobs to the world economy, according to some estimates.

But India insists that the deal should be concluded as a "package" alongside a permanent agreement on stockpiling food to feed its millions of poor people.

"India stood firm on its demands despite immense pressure," Sitharaman told parliament as lawmakers thumped their desks in approval.

"The government of India is committed to protecting the interests of our farmers against all odds," said Sitharaman, whose government came to power in May.

"A permanent solution on food security is a must for us and we cannot wait endlessly in a state of uncertainty while the WTO engages in an academic debate on the subject of food security which is what some developed countries seem to be suggesting."

- 'Suicide and starvation' -

India's stand sparked widespread international condemnation, but Sitharaman said she was confident that New Delhi could persuade WTO members to understand its concerns.

"I am confident that India will be able to persuade the WTO membership to appreciate the sensitivities of India and other developing countries and see their way clear to taking this issue forward," she said.

US Secretary of State John Kerry told Prime Minister Narendra Modi during talks last week that India's position on the deal sent the wrong message on opening up the country's economy.

India, which has sought since independence to eradicate hunger, buys grain at above-market prices from farmers and sells the food at subsidised prices to some of the hundreds of millions of poor.

The stockpiling is popular with poor voters in the world's largest democracy, but wealthy nations say that the policy distorts global markets.

Finance Minister Arun Jaitley said if the government backed down on its stand, hundreds of thousands of farmers faced suicide and starvation.

Jaitley said India must be allowed to continue buying food from farmers -- who cannot compete at the global level with government-backed US and European farmers -- without fear of challenge at the WTO.

"Our farmers will be reduced to starvation and suicide. We can't be a party to that," he told the NDTV network late on Monday.

The WTO's members gathered in Geneva last week for what was envisioned as a rubber-stamp approval of the customs deal called the Trade Facilitation Agreement.

When the deal was struck in Bali, WTO members agreed on a "peace clause" to allow India's food stockpiling with no penalties until a "permanent" solution by 2017.

But Jaitley said the lack of progress on negotiations meant it was unclear when a permanent solution would be found.

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