The US and India have reached an agreement on food security which could finally lead to breakthrough on the World Trade Organisation (WTO)'s global trade deal.
A wide-reaching deal – the most significant in WTO history – was reached in Bali last year but stalled after India refused to agree to change its food stockpiling and subsidy policies.
On the eve of the G20 Summit in Brisbane, it appears that a breakthrough has been achieved. At a press conference in New Delhi, India's Commerce Minister said: "India and the U.S. have successfully resolved their differences relating to the issue of public stock holding for food security purposes in the WTO in a manner that addresses our concerns."
The Bali package on trade facilitation liberalises trade between the 160 WTO members by removing red-tape and harmonising customs. However, it would also allow India to stockpile food over and above its agreed subsidy limit without facing legal action from other countries, in order to ensure food security.
The landmark Bali deal, agreed in December, could add $1tn to the global economy, analysts estimate. At the time, the WTO Director-General Roberto Azevedo said: "For the first time in our history, the WTO has truly delivered, adding that the Bali package would put the WTO on a roadmap to a more comprehensive deal in the form of the stalled Doha Round of negotiations.
In a statement, the US Trade Representative said Michael Froman added: "This has been a good week for trade and the growth and jobs it supports here in the United States. Together, these will provide a major boost to the global trading system at a critical time in the world's economic recovery, a central focus of the upcoming G20 Summit."
More to follow