Host Indonesia optimistic of chances for WTO deal

Host Indonesia optimistic of chances for WTO deal
File photo of Indonesian Trade Minister Gita Wirjawan

NUSA DUA, Indonesia - Indonesia's trade minister said Monday there was a "chance" of salvaging an elusive deal on global commerce at a crunch WTO summit in Bali but warned food security remained a major hurdle.

The 159 WTO members are meeting for a summit billed as a make-or-break attempt to revive the "Doha Round" of talks on slashing world trade barriers, as well as the trade body's own relevance.

But despite a determined effort by new WTO chief Roberto Azevedo last week in Geneva, the trade body failed to agree on even a modest deal to put to trade ministers who will open the four-day gathering on Tuesday.

Following a meeting of the G-33 group of developing countries, Trade Minister Gita Wirjawan expressed confidence there could be agreement on a deal, which is seen as a stepping stone to relaunching the Doha Round.

"There is hope that in the next couple of days if we sit down together with the key countries... I think there is a chance" of a deal, the minister, who chaired the meeting, told reporters in the southern Balinese resort of Nusa Dua.

He said gaps had narrowed on the issue of trade facilitation.

But he cautioned that there was still no agreement on a key part of the deal related to food security, in which India is seen as the major stumbling block.

New Delhi has led demands for changes to the agreement on agriculture so it can offer greater subsidies for farmers, particular as the ruling Congress party believes the current rules threaten a landmark food subsidy programme seen as a vote-getter in elections next year.

Under current WTO rules, subsidies cannot total more than 10 per cent of production.

But New Delhi fears that when its landmark scheme to redistribute grain to two-thirds of the country's population comes fully into force, it will break the cap.

Under a compromise in the draft Bali deal, the subsidised food policy would be allowed for four years - but there is speculation India will push for a permanent exemption following pressure from powerful farmers' unions.

At the weekend, the Indian government suggested it would take a hard line on the issue, saying that Trade Minister Anand Sharma "will be firm on the core agenda of food security" in Bali.

The Doha Round, launched in Qatar in 2001, aims for a wide-ranging accord to open markets and remove trade barriers but the talks have stalled as rich and poor countries spar over the deal.

Negotiators had long ruled out major progress in Bali, instead working on lower-level thematic accords that could be fed into a wider package later.

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