WTO makes last push for trade deals, with eye on defiant India

GENEVA • Prospects for World Trade Organisation deals aimed at resolving some of the global economy's most pressing but politically thorny issues hung in the balance as the trade body extended by a day its ministerial conference in Geneva.

Trade ministers yesterday were hoping to clinch deals aimed at widening vaccine distribution, boosting food security, reducing fishing subsidies and extending a moratorium on digital-commerce tariffs. Talks will continue today to try to loosen the key sticking points.

India, for instance, was refusing to bend on its defence of its domestic fishing industry. Indian Commerce Minister Piyush Goyal told a meeting of delegates that it wants exceptions on a 20-year negotiation to curb harmful government fishery subsidies, according to a statement on his ministry's website. He also insisted members water down the WTO's subsidy rules for government-backed food-purchasing programmes aimed at feeding poor citizens, according to a separate statement.

India, South Africa and other developing countries have also sought a waiver of intellectual property rights for vaccines, treatments and diagnostics for over a year, but faced opposition from several developed nations with major pharmaceutical producers.

"The Indian delegation has raised everybody's eyebrows," Mexican Undersecretary of Foreign Trade Luz Maria de la Mora said in an interview. "You cannot come to a negotiating forum, particularly at this stage, making demands that they brand as non-negotiable."

The tough stance by one of the world's largest developing economies is just one example of the difficulty the WTO faces reaching a package of small but symbolically important deals.

Failure to do so may cement the view that the WTO is no longer a viable forum to address the shortcomings of international commerce.

"We are getting to the tough spot of the negotiations now," WTO spokesman Dan Pruzin said in a media briefing late on Tuesday. "The not-so-good news is that we are running out of time."

The WTO has operated for more than a quarter century on the basis of consensus decision-making - meaning any one member's veto can scuttle agreements. That model, critics say, is also why it has been largely ineffective as a deal-making forum for much of the past decade.

The top trade officials are now mulling over the prospect of a more polarised era of trade relations where multilateral deals become a relic and like-minded nations move forward without the holdouts.

"That should be a concern to India and smaller, poorer countries that rely on the certainty of a rules-based system to benefit from trade," said Mr Chad Bown, a senior fellow at the Peterson Institute for International Economics.

Prior to Tuesday, many governments were hopeful that a fisheries agreement - which aims to help prevent overfishing of oceans - would be the WTO's first multilateral accord in almost a decade.

But India is seeking broad exemptions, including a 25-year phase-in period and a 200-nautical-mile exclusion for its artisanal anglers.

"There are countries which are taking some very strong positions - very far-reaching demands - which weakens the purpose of this agreement," European Union executive vice-president Valdis Dombrovskis told reporters.

Ultimately, any failure to conclude multilateral agreements will not unravel WTO's system of rules that govern more than US$28 trillion (S$38.9 trillion) worth of trade flows each year. But it could be the clearest sign yet that the world's trading partners are redrawing allegiances along geopolitical lines.

BLOOMBERG, REUTERS