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India-US Sealed WTO Deal
Nov 17, 2014

India and the United States have resolved a row over food subsidies that has been blocking a landmark global trade agreement for months. The Trade Facilitation Agreement (TFA) has been stalled since July, when India refused to endorse the pact unless its food stockpiles were exempted from possible punitive measures, prompting the US to accuse it of taking the World Trade Organization to the brink of crisis.

Now both sides agreed India's food security programmes would not be challenged under WTO rules until a permanent solution regarding this issue has been agreed and adopted. The deal would unlock progress toward the full and immediate implementation of the WTO Trade Facilitation Agreement, which will lower the costs of trade for developed and developing countries. This will end the impasse at the WTO and also open the way for the implementation of the Trade Facilitation Agreement.

The proposal floated by India has also asked for a quick permanent solution on the public stockpiling of foodgrain issue, which will require amendments in the agreement on agriculture.

India’s decision in July to hold up the landmark deal to reduce trade barriers came after the WTO's members agreed at a December 2013 meeting in Bali to implement the pact. At the time of the Bali accord, WTO members agreed on a four-year peace clause to protect India from being punished over subsidies and stockpiles until a permanent solution was reached. But after the Bali pact, India complained there were nearly two dozen meetings on the trade facilitation pact and just a handful on subsidies.

Bali was the first multilateral agreement concluded by the WTO since its inception in 1995. It also signalled the first concrete progress on the Doha Round of trade liberalisation talks, launched in 2001 and aimed at underpinning development in poorer nations. It took nearly a decade to conclude the trade facilitation part of the talks, which began in 2004.


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