Business groups and lawmakers are urging India to rethink its decision to block a trade pact that would streamline customs rules to help move goods more efficiently across borders.
Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers (NAM), said completion of the World Trade Organization (WTO) deal inked seven months ago in Bali is in the hands of the Indian government.
"Our strongest hope is India will look at this again and see how important it is for India but also to create economic opportunities around the world."
The deal has been billed as one more the most important by the WTO since the Doha talks started in 2001 and was expected to revive the group.
“India has a choice to stand up for principles or prevent what some would argue is the most impactful trade agreement at the global level in 20 years,” Dempsey said.
The agreement is expected to create 21 million jobs — the bulk of them in nations with developing economies — and produce $1 trillion in global economic activity, according to estimates.
John Murphy, senior vice president for international policy for the U.S. Chamber of Commerce, called the decision by a few WTO members “baffling” after an agreement was unanimously endorsed in Bali.
“This agreement would promote economic growth and raise living standards around the world, with most gains going to the world’s poorest,” he said in a blog post.
He said many governments are considering how to secure the agreements benefits for the WTO members that support its swift implementation.
Several U.S. officials said that the failure of India to complete the agreement by the Thursday deadline brings into question the credibility of the new government.
Secretary of State John Kerry expressed concerns during a Friday visit with Indian Prime Minister Narendra Modi over his refusal to ratify the deal.
"Failure to sign the Trade Facilitation Agreement sent a confusing signal and undermined the very image Prime Minister Modi is trying to send about India," a State Department official told reporters after Kerry's meeting with Modi, according to news reports.
Senate Finance Committee ranking member Orrin HatchOrrin HatchMnuchin's former bank comes under scrutiny Trump’s economic team taking shape Huntsman considering run for Senate in 2018 MORE (R-Utah) called the decision “an inauspicious start for the new Modi government.”
“There is much work to be done on the protection of intellectual property rights and other important economic issues if India is truly going to attract investment and grow its economy.”
House Ways and Means Committee Chairman Dave Camp (R-Mich.) said India’s actions "are completely unacceptable and put into doubt its credibility as a responsible trading partner."
"As we determine next steps, I am committed to the WTO as an institution, and I hope that we can salvage the Trade Facilitation Agreement, either with or without India."
But on Friday, Indian officials signaled that they would be willing to sign the deal as early as September, according to news reports.
"It is ridiculous to say the Bali deal is dead," a senior official at India's trade ministry.
"We are totally committed to the TFA, and only asking for an agreement on food security," an official said.
During December's talks, India had gain concessions on stockpiling food at subsidized prices with the expectation that a permanent solution would be in place by 2017. But Indian officials changed course this week and pressed instead for implementation of the trade facilitation agreement and a food program at the same time.
U.S. Trade Representative Michael FromanMichael FromanWhite House gives up on passing the TPP Froman: Congress can pass the Pacific Rim trade deal US confirms China has ended tax breaks for domestic airplanes MORE he “will consult with our trading partners on potential paths forward.”
“The United States regrets that a handful of members have decided not to adhere to their commitment to implement the TFA consistent with the Bali agreement,” Froman said.
Hatch said that “sadly, just as with the collapse of the Doha Round in July of 2008, India has once again blocked significant progress towards greater trade liberalization and by doing so, put the broader international trading system at risk.”
The deal reached in December would have reduced trade costs, especially in developing countries.
"It's one thing for a country to be a tough negotiator,” said Trade Subcommittee Chairman Devin Nunes (R-Calif.).
“It is entirely another to agree to a deal with your trading partners, and then just simply walk away months later, insisting instead on one-sided changes. That’s what India has done here by going back on its word, running the risk of eliminating any sense of good will toward it."