India Strikes Deal with US Over Food, Breathing New Life into Doha Trade Talks

World Trade Organisation relieved as it had faced the possibility that the collapse of talks begun 13 years ago would lead to countries giving up on the WTOStalled global trade talks were given fresh impetus on Thursday when India and the United States struck a deal over food security for the world's second most populous nation. After a four-month stand-off, New Delhi bowed to growing international pressure to rescue the World Trade Organisation from potential irrelevance when it agreed to drop opposition to an agreement designed to smooth the passage of goods across borders. In return, the WTO will agree to an open-ended peace clause that will shield New Delhi from legal action until there is a permanent settlement on how much food India can stockpile. The India-US accord was greeted with relief by the WTO's director general, Roberto Azevêdo, who was faced with the possibility that the collapse of talks begun 13 years ago in Doha would lead to countries giving up on his organisation and signing bilateral trade accords instead. Azevêdo is hopeful the delayed deal on trade facilitation - agreed in Bali last December - will be the catalyst for concluding negotiations on manufactured goods, agriculture and services that have been going on since November 2001. The first multi-lateral trade breakthrough in two decades was put in jeopardy after the new Indian government of Narendra Modi said the safeguards for feeding his country's poor were not strong enough. "This breakthrough represents a significant step in efforts to get the Bali package and the multilateral trading system back on track. It will now be important to consult with all WTO members so that we can collectively resolve the current impasse as quickly as possible. "Implementation of all aspects of the Bali package would be a major boost to the WTO, enhancing our ability to deliver beneficial outcomes to all our members." New Delhi's hardline approach found it almost isolated at the WTO, with other members making it clear that they would, if necessary, sign a trade facilitation deal without India. Trade sources said the signing this week of a deal on trade in IT goods between the US and China has added to the pressure on the Modi government. After a flurry of diplomatic activity in recent weeks, India will back the trade facilitation deal in exchange for negotiations starting in the New Year designed to come up with a food stockpiling programme that does not distort trade. The International Chamber of Commerce (ICC), which has said streamlining customs procedures could add $1 trillion and 21m jobs to the world economy, said the breakthrough would open the door to new trade talks.Indian farmers return home carrying bundles of paddy on the outskirts of Gauhati. New Delhi's hardline approach found it almost isolated at the WTO, with other members making it clear that they would, if necessary, sign a trade facilitation deal without India. Photograph: Anupam Nath/AP