Chances fade for deal at WTO meet amid subsidy deadlock

The prospect for a new agreement on world trade faded at talks in Bali on Thursday as India maintained its opposition to a proposed ban on food subsidies.

Ministers meeting late into the night failed to find consensus over a so-called Bali package put forward at the Ninth Ministerial Conference of the World Trade Organization on the Indonesian resort island.

India would not approve the deal unless it was given a permanent exemption from rules on food subsidies, Trade Minister Anand Sharma said.

The proposed deal would rule out governments supporting more than 10 per cent of their agricultural production, but would allow an exemption period of four years for developing countries. India has said the exemption should not be time limited.

“Can we barter away or compromise when it comes to the fundamental right to food security?” Mr. Sharma said at a news conference on Thursday.

“The answer is a firm no. This is a fundamental issue we will never compromise [on].” The Indian parliament in September passed a bill to provide subsidized food for two-thirds of the country’s population, some 820 million people.

The United States and the European Union, as well as many developing countries in Africa and Asia, fear that an Indian exemption would result in subsidized produce from India arriving on their domestic markets, hurting their farming industries.

The disagreement over subsidies threatens to scupper a deal at the meeting, due to end Friday, which aims to simplify international customs procedures, reduce agricultural subsidies and offer aid to the poorest countries.

The US has warned that failure at the meeting would deal a “debilitating blow” to the WTO as a forum for multilateral negotiations.