WTO’S Director-General Roberto Azevedo will make one more attempt to end TFA impasse

Economic Times, July 29, 2014
World Trade Organization Director-General Roberto Azevedo will make a last-ditch effort on Tuesday to create consensus over the acceptance of the trade facilitation agreement (TFA) and end the impasse that has raised concerns over the future of the multilateral organisation and the Bali trade deal.

The general council of the WTO didn’t meet on Monday, but hectic parleys were ongoing to break the deadlock after India took a hard stand, seeking postponement of the July 31 deadline to adopt the agreement. Azevedo has called a meeting of all group coordinators on Tuesday, where he will “outline for them what has happened and what efforts are under way to bring about a resolution to what has emerged as a real crisis here”, said a source in Geneva where the WTO is based.

Meanwhile, India’s Department of Commerce made a presentation at the Prime Minister’s Office on Monday, where the nation’s stand at the WTO was likely discussed. In Geneva, Azevedo held a series of meetings with various stakeholders to end the impasse.

The general council may meet before July 31 only if someone comes up with a consensus proposal. If there aren’t any such proposal, the trade facilitation protocol amendment will miss its deadline, a half victory for India.

The legally binding TFA aims to provide seamless crossborder trade by easing customs procedure and red tape and needs to be ratified by July 2015. India sought deferment of the July 31 deadline until the members resolve on delivering the entire Bali package, including issues of food security crucial to developing countries, as a package.

With a large chunk of rich countries not willing to renegotiate timelines, and India sticking to its stand of a single undertaking, a breakthrough will be the second big win for Azevedo after the Bali deal in December.

There were no signs of efforts to mollycoddle India by developed countries until Monday. New Delhi has only got the backing of countries such as Bolivia, Cuba, Venzuela and African nations, whereas Pakistan, Indonesia, Brazil and China are opposing India’s stance of blocking the deal.

As per the deal worked out in Bali in December 2013, India had agreed to the TFA in return for an interim relief to developing countries under the clause that allows members to impose trade restrictions on countries that breach the cap of 10% on farm subsidies.

The cap is calculated on total production based on the 1986-88 output, a limit already close to being breached by most developing countries on account of high inflation over the years. However, as per the “peace clause” reached in Bali, no country can take action against another till a lasting solution to the issue of public stockholding for food security is firmed up.

A group led by Australia has apparently threatened that India might lose the peace clause if New Delhi blocks the TFA. “Azevedo is an old hand at WTO. He was Brazil’s ambassador to WTO for eight years and a very good negotiator. Moreover, he is not a politician like his predecessors. He did it at Bali, so it wouldn’t come as a surprise if he breaks the deadlock in this situation too,” said Pradeep S Mehta, secretary-general at CUTS International.

“In a system which is getting so depressed, he has brought a huge amount of relief.” Officials at the WTO said since the two-day general council meeting didn’t yield any consensus, the meeting could reconvene with a discussion on trade facilitation protocol amendment only if any delegation comes forward with a proposal that may lead to a consensus.

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