Introduction of Trade Facilitation Agreement protocol in the general council at Geneva postponed by a day
Trade minister Nirmala Sitharaman. India has objected that without the preparatory committee on trade facilitation finalizing the protocol, it should not be put before the council for consideration.
The World Trade Organization (WTO) postponed introducing the Trade Facilitation Agreement (TFA) protocol in the general council of the multilateral trade body at Geneva by a day, keeping the suspense on the fate of the first global trade deal reached last year in Bali. The general council—the WTO’s highest decision-making body outside of ministerial conferences—is meeting on Thursday and Friday. It needs to adopt the protocol of amendment by 31 July that would bring the TFA into the WTO’s legal framework.
India’s trade minister Nirmala Sitharaman expressed disappointment in a telephone conversation with WTO director general Roberto Azevedo that the TFA protocol is being put before the general council even after India expressed its reservations, Mint reported on Wednesday. India has objected that without the preparatory committee on trade facilitation finalizing the protocol, it should not be put before the council for consideration. India’s permanent representative to WTO, Anjali Prasad, told the preparatory committee on trade facilitation in Geneva on 3 July that the pace of implementation of the Bali decisions has been heavily skewed in favour of TFA, and decisions on other matters that were meant to have progressed together have been relegated to the background.
“We are deeply concerned that the ministerial decision on public stockholding for food security purposes is getting sidelined,” Prasad said. “Till we have an assurance and visible outcomes which convince developing countries that members will engage in negotiations with commitment to finding a permanent solution on public stockholding and other Bali deliverables, India will find it difficult to join the consensus on the protocol of amendment.” At the heart of the problem is the current rule of WTO that caps subsidies to the farmers in developing countries at 10% of the total value of agricultural production based on 1986-88 prices.
Developing countries are complaining that the base year is now outdated and they need to be given leeway to stock enough foodgrains for food security of millions of their poor. After intense negotiations, India derived a promise from the developed countries that a permanent solution to the issue of food security and public stockholding will be found within four years and meanwhile, according to a temporary arrangement, no country will drag the developing countries to dispute settlements within WTO if they breach the food subsidy limits till a permanent solution is found. India agreed to the TFA which is meant to simplify customs procedures, facilitate the speedy release of goods from ports and cut transaction costs—measures that are expected to benefit rich nations more than developing countries such as India—in return for the agreement on food security.
While the then UPA government led by trade minister Anand Sharma hailed it as a victory for developing countries, then Bharatiya Janata Party leader and now finance minister Arun Jaitley had criticized the government for giving in to pressure from developed countries. While developed countries are insisting that linking a permanent solution to food security with the TFA which has already been sealed at Bali is unfair, developing countries like India are maintaining that they suspect developed countries will run away after they sign off on the TFA and will not be keen to come to the table for finding a solution to the food security issue. They want to see some progress in finding a permanent solution to food security before they sign off on the TFA.
A commerce ministry official speaking under condition of anonymity said there is no great sanctity attached to the 31 July deadline. “WTO has missed many deadlines to complete the Doha development round,” he said. The official said first the 31 July deadline needs to be postponed and then developing and developed countries can sit down to find common ground for a road map of progress on food security and public stockholding that would satisfy the developing countries including India. Pradeep S. Mehta, secretary-general of the NGO CUTS International and former member of the WTO’s high-level panel on the future of trade, said India is doing the right thing by linking a permanent solution to food security with TFA. “Rich countries have the historical habit of dragging issues of interest to the poor while pushing issues of their interest on fast track. This needs to be challenged,” he added.
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