Thursday, 13 November 2014

India wins US nod for food scheme......

India won US support for a massive domestic food stockpiling scheme on Thursday, rescuing the biggest global trade deal in two decades and giving new Prime Minister Narendra Modi a victory without major concessions.
Under the pact with Washi-ngton, India will lift a veto on a global agreement on streamlining customs rules that is likely to add $1 trillion to the world economy as well as 21 million jobs, 18 million of them in developing countries.
Modi, elected in May, had pulled the plug on the World Trade Organization (WTO) agreement four months ago because he objected to a related deal on food security.
Washington, which was the principal opponent of India's food scheme on the grounds that it distorted trade, hailed Thursday's deal. 
Trade Represe-ntative Michael Froman said it would "give new momentum to multilateral efforts at the WTO" and predicted the Trade Facilitation Agreement (TFA) struck by the WTO last year in Bali, Indonesia, would now win quick ratification.
Yet, at a conference call to brief reporters on the deal, Froman declined to answer questions on what concessions India had given in return.
In talks to break the deadlock, India stressed the importance of ensuring that its 1.25 billion people, many of them poor, have enough to eat. 
It won an open-ended commitment from Washin-gton to protect its food purchase and distribution scheme from any challenge under WTO disputes procedures.
Without the clause, India could have been vulnerable to attack by trade partners over exports of any surplus grain stocks accumulated in government warehouses.
New Delhi's blockade had plunged the WTO into its worst crisis in two decades, leading Director General Roberto Azevedo to float the idea of abandoning the consensus principle on which the 160-member group operates.
"This is a huge plus for the world trading system - it uncorks TFA and potentially other deals," said Frederic Neumann, co-head of Asian Economics Research at HSBC in Singapore. "From Modi's perspective, it's a major victory to say we've got an indefinite stay of execution on our food subsidy scheme."
Modi instructed aides early last week to strike a deal. Through-out the impasse, Indian officials expressed quiet confidence that Azevedo would not win enough backing to follow through on his threat.
India had called for a perm-anent 'peace clause' to protect its food stockpiling scheme, subject to certain conditions, until a permanent solution on the issue was found at the WTO. Under the Bali accord, the peace clause would have expired after four years.
The India-United States compromise should now go before a December 11-12 meeting of the WTO's General Council, its highest decision-making body, for ratification, Indian trade minister Nirmala Sitharaman said.