India threatens to derail WTO deal, prompts angry US rebuke

NEW DELHI/GENEVA (Reuters) - India threatened on Friday to block a worldwide reform of custom rules, which some estimates say could add US$1 trillion to the global economy and create 21 million jobs, prompting a U.S. warning that its demands could kill global trade reform efforts.

Diplomats from the 160 World Trade Organisation member countries meeting in Geneva had been meant to rubber stamp a deal on "trade facilitation" that was agreed at talks in Bali last December in the WTO's first ever global trade agreement.

But India, in an 11th-hour intervention, demanded a halt to the trade facilitation timetable until the end of the year and said a permanent WTO deal on food stockpiling must be in place at the same time, well ahead of an agreed 2017 target date.

"My delegation is of the view that the adoption of the TF (trade facilitation) Protocol be postponed till a permanent solution on public stockholding for food security is found,"Indian Ambassador Anjali Prasad told the WTO meeting.

The ultimatum revived doubts about the future of the WTO as a negotiating body, and many diplomats said Delhi's stance could derail the whole process of world trade liberalisation.

"It is no use to sugar coat the consequences of such action or to pretend that there would be business as usual in the aftermath," U.S. Ambassador Michael Punke said. "Today we are extremely discouraged that a small handful of members in this organisation are ready to walk away from their commitments at Bali, to kill the Bali agreement, to kill the power of that good faith and goodwill we all shared, to flip the lights in this building back to dark," he said in a statement.