India scuppers international trade pact | Asia Pacific

India scuppers international trade pact

India scuppers international trade pact

Updated 4 August 2014, 13:23 AEST

After almost 20 years of difficult negotiations, the only major agreement by the World Trade Organisation has failed to eventuate.

That it involved thousands of technocrats and politicians and at times even heads of state, meant nothing in the final hours.
 
It took just one country to have second thoughts, for it to fail.
 
India decided it couldn't ratify the Bali Agreement thrashed out last year in Indonesia and which at the time was applauded as a milestone.
 
The WTO claims it would have added one trillion dollars to economic growth and 21 million new jobs globally by making it easier to trade across borders.  
 

Correspondent: Karon Snowdon

Speakers: Harold McGraw, Chairman, International Chamber of Commerce and CEO, McGraw-Hill group of Companies; Andrew McKenzie, BHP Billiton's CEO; Brian Clark, Director of Trade and International Affairs at the Australian Chamber of Commerce and Industry; Roberto Azevêdo, WTO Director General

SNOWDON:  This was Harold McGraw, the chairman of the International Chamber of Commerce and CEO of the McGraw-Hill group of Companies speaking two weeks ago at the G20 business meeting in Sydney.
 
MCGRAW:  That trade facilitation agreement, customs processing, all the things...crossing borders. Now, that works as one trillion dollars to economic growth and 21 million new jobs,18 million that are outside the United States, that's a tremendous accomplishment if we can do it.
 
SNOWDON: At the same meeting BHP Billiton's CEO, Andrew McKenzie outlined the significance of the Bali Agreement to the very existence of the WTO. 
 
MCKENZIE: In terms of trade facilitation if we want a future of the WTO then the real hope of re-energising that comes through the Bali Agreement. So we think the successful and rapid implementation of the Bali Agreement is critical.
 
SNOWDON:  But it's not to be.  The deadline to ratify the agreement passed last week with India holding out.
 
The Bali Agreement would have cut regulation red tape, and streamlined customs arrangements at international borders. 
 
It might even have helped reduce some of the massive 30 per cent of food losses which occur through poor transport and other infrastructure. 
 
Brian Clark, the Director of Trade and International Affairs at the Australian Chamber of Commerce and Industry says there was lots in the Bali Agreement for Australia.
 
CLARK: That of itself, would have reduced significant costs, and administrative burden on industry, particularly through global supply chains, as goods move from one country to another, but it also had some improvements around some of the agricultural areas, including cotton and some aspects on food security for the Indians, which have now resulted in the stalling of the talks.
 
SNOWDON: Under new Prime Minister Nahrendra Modi,  India wanted a permanent deal whereby developing countries wouldn't be challenged under WTO rules for subsidizing farmers or stockpiling food.
 
With its irregular monsoon rains, subsistence farmers and high levels of poverty India's government buys enormous amounts of rice and wheat at above market prices for distribution to the needy.
 
As well,  New Delhi characterises the stand off as a rich verses poor nation battle.
 
Whichever way it's looked at this latest failure throws into doubt the future role of the WTO with its 160 members as a trade negotiating body.
 
The ACCI's Brian Clark says global trade agreements are still important but a new way to achieve them is needed.   
 
CLARK: Maybe this is the impetus which will allow new pathways to emerge. We cannot hold the world to hostage with one or two countries holding out, because they've got some special interests. We have to be dealing with maybe the critical mass of countries, rather than all of them.
 
SNOWDON: And with the last word, WTO Director General Roberto Azevêdo seemed defeated when he acknowledged the failure of last minute talks.
 
AZEVÊDO: Once again I am very, very concerned. (And) if the system fails to function properly then the smallest nations will be the biggest losers. They're the ones that may no longer have a seat at the table. My fear is that the smaller and more vulnerable an economy is, the more it will suffer. It would be a tragic outcome for those economies - and therefore a tragic outcome for us all. 
 
 

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