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   Home >    World Trade Organisation: News -2014                                                   


   India not to support the WTO trade facilitation agreement
New Delhi, August 3, 2014: India stood firm on its stand not to support the World Trade Organization's (WTO's) trade facilitation agreement (TFA) if it weren't bundled with a roadmap for rules on food subsidies. WTO director general Roberto AzevÍdo told ambassadors late on Thursday  that despite intensive consultations, "we have not been able to find a solution that would allow us to bridge the gap" on the adoption of the protocol on the TFA. He urged members "to reflect long and hard on the ramifications of this setback".

"I have been exploring whether there are any possible ways that we might find convergence. However, 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," Azevedo said.

At the Bali ministerial in December last year, the WTO member countries had agreed to make trade easier, faster and cheaper by making systems transparent and reducing red tape by agreeing to adopt the TFA from July 31. 

India, however, withstood mounting pressure to ratify the TFA from the developed countries including the United States which blamed India's hard bargain strategy for the eventual collapse of the talks putting the WTO's future on "uncertain ground."

In a statement, the US has regretted that "India and handful of (WTO) members" decided not to adhere to their commitment to implement the TFA  consistent with the Bali agreement.

"The US is fully committed to the multilateral trading system embodied in the WTO. But the WTO system relies on its members to implement the commitments to which they have agreed," US trade representative Mike Froman said in a statement. 

New Delhi, however, is of the view that without a permanent solution on food subsidies, India's public stockholding programmes such a buffer stock of food-grains will be hampered by the present ceiling on subsidy to farmers.

"This is a good enough time to think about our follow up action. Obviously our proposal is there on the table and we will pursue our proposal," Rajeev Kher, commerce secretary told PTI. 

Existing rules cap the value of food subsidies at 10% of the value of  production. But the way the support is calculated at prices of more than two decades earlier means many countries would find it difficult to stay within the limit, potentially attracting strong penalties from the trade body. This will affect India's food security programme and food grain procurement through the minimum support prices (MSP). 

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