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India Should Not Reject WTO’s Free Trade Deal

Posted August 05, 2014

Under Economic Issues, International Trade Issues

(Gulf News)

Many leading nations want to go ahead without India because they do not want to lose years of hard diplomacy

Scrambled diplomacy by the Bharatiya Janata Party (BJP) government in India has tried to mitigate the effects of its last minute refusal to sign the World Trade Organisation’s very significant Trade Facilitation Agreement (TFA) pact that was agreed by all parties in Bali last year. The deal is an important step forward for world prosperity and would have been the WTO’s single major success after 19 years of failure, which would add $1 trillion (Dh3.67 trillion) and 21 million jobs to the world economy.

Instead, India changed its mind and rejected the deal on July 31, which meant that it automatically lapsed. India’s reason for its refusal to pass the previously agreed deal on easing global trade was that it wanted a parallel demand for concessions on its plan to subsidise and stockpile food grains to be conceded immediately by the other 152 WTO nations rather than waiting until 2017 as had been agreed in Bali. Nonetheless, Indian diplomats have insisted that India still wants to sign the free trade deal despite wrecking it, and they are putting out a message that if the rest of the WTO agrees on the food subsidies, India can sign the TFA in September. Read more here.