India talks tough on WTO, but does not rule out deal

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India's trade minister said on Friday he will not compromise on food subsidies for the poor at a WTO meeting this week, but left open the possibility of an interim subsidy deal designed to salvage a trillion-dollar trade pact.

India is seen holding the key to the credibility of the World Trade Organization talks and to a global trade deal at the meeting in Bali next week.

India will next year fully implement a welfare programme to give cheap food to 800 million people that it fears will contravene WTO rules that limit farm subsidies to 10 percent of production.

The programme relies on large-scale stockpiling and procurement at minimum prices and is a central plank of the government's bid to win a third term in office next year.

India has demanded that poor countries be exempt from the rule and the issue has threatened to derail the Bali talks after diplomats failed to agree on a compromise last week.

Trade Minister Anand Sharma, who will lead India's delegation to Bali, said the G33, a group of developing countries, supported India's stand on food subsidies, which he said was non-negotiable.

"As far as what we give to our poor people that is our right, that is insulated in entirety from any multi-lateral negotiations or WTO discussions. That is a sovereign space and for India it is sacrosanct and non-negotiable," he said.

However, he refused to say whether he would accept a proposal led by the United States to waive the 10 percent rule until 2017. Indian media has reported that India is demanding a guarantee that the waiver will continue after that date if a solution is not found.

"I would like to state it clearly, negotiations are negotiations," he told reporters.

"Final positions will be known when ministers make their country's statements. What has been said about India's position is either based on incomplete information or if I may say is speculative."

He said India's farm subsidies for procurement of foodgrains from farmers were under the 10 percent limit of the current WTO rules, but there was a need for a final settlement on the issue.

"We will continue to work to resolve outstanding issues so that the outcome is acceptable to all countries - developed, developing and LDCs (least developing countries)."

On the key issues in the ongoing negotiations, India agreed with three draft proposals on agricultural export subsidies, the reduction in export subsidies and the need to offer LDCs access duty free, quota free markets.

He said India has unilaterally decided to raise imports from the LDCs by expanding tariff lines to 96.2 percent from 85 under which these countries can export to India without any duty or quota restrictions.

India has also agreed to draft proposals on trade facilitation measures.

"We believe that facilitating trade brings down transaction costs and is also good for the economy," he said.

However, there was still disagreement on certain issues under trade facilitation, on which India's concerns were focused on issues related to bank guarantees for exports and expediting courier services.

He said Indian remained optimistic about the outcome of Bali summit provided developed countries agreed to address concerns of developing and least developing countries.

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