Kerry presses India on global trade deal as deadline looms

NEW DELHI (Reuters) - U.S. Secretary of State John Kerry, who arrived in India on Wednesday for an official visit, has pressed New Delhi to drop its opposition to global trade reforms, saying it was a test of the country's commitment to advance economic liberalisation.

Mr Kerry made the call in a newspaper article, penned along with U.S. Commerce Secretary Penny Pritzker, published hours ahead of his arrival for talks aimed at revitalising ties that have been mired in disputes over trade, intellectual property rights and climate change.

India has threatened to block a worldwide reform of customs rules, saying it must be accompanied by a parallel agreement allowing developing countries more freedom to subsidise and stockpile food grains.

The deadline for the deal that the World Trade Organisation says could provide a US$1 trillion stimulus to the global economy is Thursday. Mr Kerry said India stood to gain by creating a level playing field instead of erecting trade barriers.

"In this regard, as we work with our trading partners around the world, India must decide where it fits in the global trading system. Its commitment to a rules-based trading order and its willingness to fulfil its obligations will be a key indication,"he said in the article in the Economic Times. India and the United States have already clashed at the WTO, with Washington saying Delhi's 11th hour resistance could kill a deal that could create 21 million jobs.

The row adds to frustration from both sides over the often prickly nature of what U.S. President Barack Obama once called "a defining partnership of the 21st century".

"It will be hard to make a persuasive case ... for a larger economic ambition with India if India decides to part ways with the entire WTO membership on the Bali deal," said Ms Alyssa Ayres, former U.S. deputy assistant secretary of state for South Asia.

Yet despite growing concern at WTO headquarters in Geneva, a senior Indian trade official said on Wednesday all was not lost.

"I am sure in the course of the next almost 48 hours there will be suggestions coming from others, and suggestions can come from us also. We will make suggestions. We are very positive and constructive," the official said. The official said India was committed to trade facilitation, but that its concerns about a lack of progress on food subsidies must be addressed. He also said India was prepared to miss the July 31 deadline if necessary.

While diplomats in Geneva said they were pessimistic that Mr Kerry's trip could provide a breakthrough, U.S. Trade Representative Michael Froman urged holdouts to come back to the table.

The U.S. trade office's top official for South Asia, Assistant U.S. Trade Representative Michael Delaney, was to join the delegation late on Wednesday.