India's stand at WTO upsets US

Modi says food security important

Giving vent to America’s disappointment over India’s stance at the World Trade Organisation (WTO), US Secretary of State John Kerry on Friday told Prime Minister Narendra Modi that New Delhi’s refusal to support a global deal for overhaul of custom rules sent out a “confusing signal”.

 Kerry also said that it undermined the new BJP-led government’s business-friendly image. Modi told Kerry that the US must understand that India has to protect its right to ensure food security of millions of poor.

Kerry met Modi before wrapping up his two-day visit to New Delhi, which was aimed at starting preparations for the prime minister’s meeting with US President Barack Obama at the White House on September 30.

The first major diplomatic engagement between the two countries after the change of regime in New Delhi was, however, overshadowed by the stand-off between India and the US as well as the rest of the developed world at the WTO.

According to a senior official of the US State Department, Kerry told Modi that India’s decision to block the Trade Facilitation Agreement (TFA) at the WTO “undermined” the message that the new prime minister was trying to send out about liberal economic policies of his government.

“The secretary (Kerry) noted that as the prime minister is very focused on this signal of being open for business and on creating opportunity, that the failure of implementing the Trade Facilitation Agreement sends a confusing signal and undermines the very message that India is seeking to send,” said the official, who accompanied the US Secretary of State in the meeting with the prime minister.

Kerry is also understood to have sent out a note of warning and told Modi that it would not be in India’s interest if a move was made to find a solution to the impasse at WTO keeping New Delhi out of the loop.

New Delhi refused to support a TFA at the WTO, saying it would not do so unless negotiations were hastened on a parallel deal to give India and other developing nations more leeway to continue with programmes providing farm subsidies and stockpiling food for distribution among poor.

India’s stance effectively blocked the TFA for now, as the deadline for the WTO to get it approved by all its 160 members and to bring it to effect passed on Thursday.

A press release from his office said Modi “emphasised” (during his meeting with Kerry) “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”.

Modi is understood to have told Kerry that India would have to protect its right to continue its agriculture-support programmes and stockpiling of food for the benefit of its farmers and millions of poor. He also told the US Secretary of State that monsoon failures often made the task of ensuring food security in the nation difficult.

New Delhi has been insisting that a permanent agreement giving developing nations more freedom to continue subsidy and food stockpiling must be in place along with the TFA, thus seeking to advance the 2017 deadline for such a deal set by the WTO last December.

The US official quoted Kerry telling Modi that the TFA would bring “tremendous benefit to emerging economies and particularly to the world’s poor”, and India’s actions, therefore, were not in keeping with his (prime minister’s) vision.