World Trade Organization (WTO) is facing its “most serious situation” ever due to the impasse over pending ratification of Trade Facilitation Agreement (TFA) and finding a permanent solution for food stockholding, director general Roberto Azevedo said on Thursday, urging the members to “keep working for a solution to the current impasse”.
Elaborating on the current situation to the Trade Negotiation Committee of the WTO, Azevedo said that despite intensive consultations, no solution has been found for the stalemate even as two months have passed after the deadline of the TFA.
“As I see it the situation is clear as day — first, we have not found a solution for the impasse … We are on borrowed time. Second, this situation has had a major impact on several areas of our negotiations … We know that members have been talking about the other, non-multilateral options that are open to them. We may see these members disengaging …,” Azevedo said adding that the member nations will have to think about the ramifications.
Earlier, the July 31 deadline for ratifying the TFA protocol was missed as India made it clear that it will not adopt the protocol on the TFA until a permanent solution was found to its public food stock holding and subsidy concerns.
It pitched for a joint conclusion of the Bali package that was agreed upon in December last year.
Amending the WTO norms regarding stockpile of food grains is critical for India in order to implement its food security programme. The current WTO norms limit the value of food subsidies at 10 per cent of the total value of food grain production. However, the support is calculated at the prices that are over two decades old (1986 as base year) and not at current prices.
On the other hand, the developed nations have been lobbying for the ratification of the TFA protocol as it will bring down their transaction cost significantly due to smoother customs processes and norms.
Calling upon the members to start a broader discussion “about the basis on which we can overcome the current scenario of disengagement”, Azevedo said, “This could be the most serious situation that this organisation has ever faced. I have warned of potentially dangerous situations before, and urged members to take the necessary steps to avoid them. I am not warning you today about a potentially dangerous situation — I am saying that we are in it right now … We should keep working for a solution to the current impasse, but we should also think about our next steps”.