US hopes for India deal on WTO rift

RAMSTEIN AIR BASE - Agence France-Presse

India threatens to block a worldwide reform of custom rules last week, but US hopes to reach a deal. REUTERS Photo

The United States hopes to reach an understanding with India to prevent the collapse of a key WTO deal, an official said July 30 as Secretary of State John Kerry headed to New Delhi.

India has threatened to scuttle the so-called Trade Framework Agreement, which would streamline global customs procedures and must be ratified by WTO members by July 31  unless the world body gives the green light to the developing power’s stockpiling of food.

A senior U.S. official said Washington was in talks with New Delhi on the row ahead of the visit by Kerry, who arrived July 30 for an annual strategic dialogue between the two countries.

“We are hopeful that as we engage in those further conservations over the next few days that some agreement will emerge that will allow the TFA to move forward,” the official told reporters on Kerry’s plane, which made a refueling stop at Ramstein Air Base in Germany.

“We think that that is in India’s interests, and we hope that that’s going to be the right outcome,” the official said, speaking under condition of anonymity in line with State Department custom.

India, which has sought since independence to eradicate hunger, buys grain at above-market prices from farmers and sells the food at subsidized prices to some of the hundreds of millions of poor people.
The stockpiling is popular with poor voters in the world’s largest democracy, but wealthy nations say that the policy distorts global markets.

On July 29 in Washington, U.S. Trade Representative Michael Froman warned that blocking the customs pact would put at risk “the credibility of the WTO as an institution.”       

Kerry will be the highest ranking official to visit India since the election victory in May of Prime Minister Narendra Modi, a Hindu nationalist who has billed himself as a free-market reformer.