By Olivia Le Poidevin
GENEVA, March 27 (Reuters) – Large differences remain between most countries and the U.S. and India as trade ministers meet to discuss reforms at the World Trade Organization, two diplomats told Reuters on Friday.
The ministers are meeting for four days in Yaounde, Cameroon, as the organisation faces a critical test to its future amid a year of tariff-fuelled trade turmoil and large-scale disruption to shipping, energy prices and supply chains due to the Middle East conflict.
“There is a real commitment among ministers to reach an agreement on reforms, but there is a big elephant in the room blocking: India and the U.S.,” a senior diplomat told Reuters.
Another diplomat from an African country said India so far has not shown signs of a change in position. Some flexibility, however, might be possible. “In the corridors we have lots of hope,” the person said.
The diplomats declined to be named due to the sensitivity of the ongoing negotiations.
While the U.S. and India acknowledge the need to reform the global trading system, they have resisted proposals of a substantive workplan on reforms.
“Unfortunately on reform I don’t see much room for manoeuvre between the U.S. and India’s positions,” the senior diplomat said.
India has also opposed an agreement to aid investment into developing countries, as well as the U.S. proposal to permanently extend an e-commerce moratorium on customs duties on electronic transmissions such as digital downloads, which expires this month.
“The U.S., China, EU and UK positions are reasonable, but there is one party that we need to see compromise from to make progress – India,” said Chris Southworth, the Secretary General of the UK International Chamber of Commerce
“I think frustration among members will start to spillover here in Yaounde if we see no progress,” he said.
INDIA’S POSITION
India’s Minister of Commerce and Industry Piyush Goyal has cast doubt on U.S. efforts to extend the e-commerce moratorium, saying it warranted a “careful reconsideration”. India is concerned about a loss of tariff revenue.
The U.S. USTR Jamieson Greer said on Thursday Washington was “not interested” in a temporary extension to the ban, only a permanent one.
Goyal has also challenged moves by the EU, U.S., Canada and others for a subset of members to take their own decisions through plurilateral agreements, saying any outcome should be agreed by consensus.
That has cast a shadow over whether an Investment Facilitation for Development Agreement to encourage foreign direct investment in developing and least-developed countries can be incorporated into the WTO rule book in Yaounde. Turkey on Thursday lifted its opposition to it.
Goyal’s position showed that India is seeking to protect the WTO’s core architecture, Ajay Srivastava, founder of Delhi-based think tank Global Trade Research Initiative and a former Indian negotiator told Reuters.
“Together, these risk turning the WTO from a rules-based body into one driven by power and selective coalitions,” he said.
There is also a deadlock at the WTO on one of New Delhi’s key priorities: a permanent solution on public stock holding to allow developing countries to give subsidies to rice and wheat farmers through a price support mechanism.
Big agricultural exporters like the U.S., EU and Australia fear it would allow countries like India to build large stocks of foodstuffs and dispose surpluses, potentially distorting trade and markets.
Randa Sengupta, a senior researcher at the thinktank, the Third World Network, said PHS was a important means to support farmers and enable food security for poorer communities in India.
‘CONSTRUCTIVE’ TALKS
A concrete reform workplan, which would be “as substantive” as possible, was within reach, Norway’s Foreign Minister Espen Barth Eide told Reuters.
“People are beginning to engage in the real questions,” he said, pointing to talks on the WTO’s core Most Favored Nation principle to treat states equally, while allowing exceptions to national security.
Similarly, Britain’s Business Secretary Peter Kyle said a text on reforms was emerging and that constructive talks were being had to ensure it gets broad agreement.
(Reporting by Olivia Le Poidevin in Yaounde, additional reporting by Manoj Kumar in New Delhi; Editing by Arun Koyyur)
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