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Global trade pact collapses after World Trade Organisation refuses to accept India's food subsidies

The World Trade Organisation was left flailing yesterday after a planned free trade pact collapsed over its refusal to accept an Indian commitment to subsidise food for the poor.

Ministers had already agreed the global reform of customs procedures in Bali last December, but were unable to overcome last-minute Indian objections and get it into the WTO rule book.

“We have not been able to find a solution that would allow us to bridge that gap,” WTO director-general Roberto Azevedo admitted.

Diplomats had expected the pact to be rubber-stamped this week and they were shocked when India unveiled its veto.

India had insisted that, in exchange for signing the trade facilitation agreement, it must see more progress on a parallel pact giving it more freedom to subsidise and stockpile food grains than presently allowed in WTO rules.

Failure to gain a positive response triggered India’s veto.

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