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India demands block $1 trillion WTO trade deal on customs rules

Proponents of WTO deal estimate TFA could add $1 trillion to the global GDP.

August 1, 2014 8:45:10 am


WTO Director-General Roberto Azevêdo has said that despite intensive consultations, trade body's 160 members have not been able to find a solution to bridge the gap on the adoption of TFA. WTO Director-General Roberto Azevêdo has said that despite intensive consultations, trade body’s 160 members have not been able to find a solution to bridge the gap on the adoption of TFA.

The WTO Director-General Roberto Azevêdo said on Thursday that despite intensive consultations, the world trade body’s 160 members have not been able to find a solution that would allow them to bridge the gap on the adoption of the protocol on the Trade Facilitation Agreement (TFA).


Proponents of the deal had estimated that the TFA meant to ease customs rules worldwide could add $1 trillion to the global GDP and create over 20 million jobs. The main opposition had come from India, which said it will not support the TFA protocol unless there is a credible assurance and visible outcomes on the other key elements of the December 2013 Ministerial decisions in Bali, Indonesia – that is, to find a permanent solution on public stock holding for food security for the hundreds of millions of poor people as well as a package for least developed countries.

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Just hours before the end of the July 31 deadline to adopt the TFA protocol, Azevêdo also urged members “to reflect long and hard on the ramifications of this setback”, adding that during August he will be travelling and talking to members to discuss how things should proceed.


India had on Thursday said the July 31 deadline for TFA is not inviolable, despite tenuous support for its case for bundling of TFA with the food security issue.


Azevêdo, who had been exploring whether there are any possible ways that the members might find convergence, said, “Of course it is true that everything remains in play until midnight — but at present there is no workable solution on the table, and I have no indication that one will be forthcoming.”


“I am very sorry to report that despite these efforts I do not have the necessary elements that would lead to me to conclude that a breakthrough is possible. We got closer — significantly closer — but not quite there,” he added.



While visiting US leaders – US secretary of state John Kerry and US commerce secretary Penny Pritzker – who have had meetings with senior Indian ministers during the day hoped for a last-minute breakthrough,  official sources here said New Delhi’s stance is unchanged but added that the country’s latest statement to the council suggested a way to end the deadlock.


Stressing that “substance” rather than “process” was paramount, New Delhi said a permanent solution to the issue of public stock-holding for food security was integral to the Bali ministerial deal, sources said, quoting the country’s revised statement.  India also claimed that failure to meet the July 31 deadline will not mean that the Bali package would collapse.


On Thursday, India had put forward a new proposal saying it was like a solution to the stalemate. “If they accept it, the deal can be signed even today.  But if  they (developed countries) believe the deadline is more important, they should agree now to what we are saying or move to a new deadline and then accept our proposal,” a senior government official said.



The permanent solution, as  India envisages, would give developing countries more liberty to subsidise its farmers including by giving them a Minimum Support Price for their produce. As for India, relaxation of the cap for  stockholding food grains would help it implement the National Food Security Act, which envisages providing highly subsidised food to two-thirds of its people.


As per the December 2013 Bali Ministerial declaration, the deadline for member countries to sign a TF protocol ends on Thursday. The TF agreement, however, will take effect only if at least two-thirds of the members ratify it by July 31, 2015.


India’s new proposal remained within the broad contours of its July 25 statement that suggested a four-point course of action including setting up a Special Session of the Committee on Agriculture to ensure clear-cut procedures, timelines and outcomes to arrive at a permanent solution on food security as well as on LDC issues by December 31, 2014. New Delhi had also sought a review of the progress of these accelerated discussions in October 2014 by the General Council.


On agriculture, the key issue is public stockholding for food security purposes. WTO norms say public stockholdings cannot be over 10% of the value of foodgrains produced. India is challenging the calculation of public stockholding at the base price of 1986-88 citing inflation and currency fluctuation since then, and therefore wants the base year to be changed.


India also wants to ensure that not an interim mechanism, but a permanent solution for the issue of public stockholding for food security purposes should be ready for adoption by the 11th Ministerial Conference in December 2017. India also wants to ensure till a permanent solution is found, no member shall challenge through the WTO Dispute Settlement Mechanism, the support provided by other members for traditional staple food crops in pursuance of public stockholding programmes for food security purposes.


– fe Bureau | Financial Express

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First published on: 01-08-2014 at 08:45:10 am

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