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WTO trade deal tantalisingly close

Friday, December 06 07:59:35

Ministers from nearly 160 member countries of the World Trade Organisation entered a final day of negotiations today with officials sounding optimistic over chances of salvaging a deal that would save the trade body from sliding into irrelevance.

"We are very close," WTO spokesman Keith Rockwell told reporters at the meeting on the Indonesian resort island of Bali. "As things stand now, the prospects are promising."

Just a day earlier, a deal that would add hundreds of billions of dollars to the world economy by some estimates teetered on the brink of collapse.

In an organization based on consensus among all of its members, attention focused squarely on India as the main stumbling block to the WTO's first global trade deal in two decades.

India has insisted it would not compromise on a policy of subsidising food for hundreds of millions of poor, putting it at odds with the United States and other developed countries.

WTO Director-General Roberto Azevedo, a former Brazilian trade negotiator, told delegates at the start of the last day of talks that there was more work to be done, but sounded upbeat on prospects for success.

"He told members they were now very close to something that has eluded us for many years and that the decisions over the next few hours would have great significance beyond this day," the spokesman said.

It is 12 years since the WTO launched the Doha Round, but the negotiations have yet to yield any concrete results. Diplomats have warned that failure in Bali would wreck the WTO's credibility as developed nations turn towards regional and bilateral trade arrangements.

A Bali trade deal, which is far less ambitious than the Doha Round had aimed for up until two years ago, would open the way to much wider trade reforms and enable the body to modernize its rules for the internet era.

The "all or nothing" agreement covers several areas, the largest of which is trade facilitation - a global standardisation and simplification of customs procedures that would tear down barriers to cross-border movement of goods.

Another part of the deal - and the one proving to be the most contentious - is focused on agriculture. Members seem largely in agreement over reducing export subsidies, opening borders to least developed countries access free, and quota free markets. The main obstacle to a deal are differences over the food subsidy policy.

India, whose government faces the risk of losing elections next year, says that its tough stance has drawn support from developing countries in Asia, Africa and South America, though the meeting's host, Indonesia, has pressed for it to soften its stand.

"We are trying to get justice for the poor people," Indian Trade Minister Anand Sharma told reporters as he entered the final day of the meeting.

Thursday's talks had stretched into the early hours of Friday without reaching any agreement.

Asked if there was a deal on the table, Sharma replied: "We are talking."

The meeting was set to end at 3.00 pm local time (0700 GMT) but can be extended.

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

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

A proposal led by the United States offered to waive the 10 percent rule until 2017. But India has rejected it, demanding the exemptions continue indefinitely until a solution is found.

If talks were to fail, the WTO may see its role eroded by regional trade pacts now being negotiated, such as the U.S.-led 12-nation Trans-Pacific Partnership and a U.S.-EU tie-up known as the TTP.

Ministers in the TPP are expected to meet in Singapore shortly after the WTO meeting in the hopes of reaching a free trade pact by the end of this year. ( C ) Reuters