India has blocked the adoption of an agreement at the World Trade Organization that would have been the first adopted agreement for the long-standing Doha round of WTO negotiations, initiated in 2001.
India, with the support of Bolivia, Cuba, Venezuela, and a few other countries, refused to adopt the trade facilitation agreement reached in Bali in December 2013, saying the effort does not do enough to ensure food security. The agreement was generally seen as one in which the bar was set low enough that all countries could agree to it.
The agreement would have limited India’s ability to subsidize its farmers and stockpile food supplies. India’s agricultural sector is large and makes up 50% of the country’s workforce, with some 500 million farmers—many who live at or around the poverty line. About 25% of those in the world who suffer from chronic hunger live in India.
One of India’s main points of contention was that while the United States is able to give its 3 million farmers US$120 billion in subsidies per year, India would be limited to giving US$12 billion to its 500 million farmers. Currently India gives US$15 billion in annual subsidies to its farmers.
Proponents of the agreement claimed that the deal would have added US$1 trillion to global GDP and generated 21 million jobs.
While India is still signaling that it desires for an extension to the deadline for approval in order to facilitate further negotiations, the move has been met with criticism from other countries.
India’s decision is getting some support though, notably from The International Fund for Agriculture Development at the United Nations.
The agreement could have been a jump-start for the long-standing and unconcluded Doha round of WTO negotiations that began in 2001. The talks have been stalled, partly due to the WTO operating on a consensus model of decision-making. The agreement would have been the first reached at the WTO since it was founded in 1995 from the General Agreement on Trade and Tariffs.