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WTO Talks Fail as India Stuck to its Demand
Aug 06, 2014

On July 31, the 160-member World Trade Organization (WTO) meeting at Geneva failed to agree on a global customs pact popularly called as the Trade Facilitation Agreement (TFA). India stuck to its tough stand that it would not ratify the TFA until a permanent solution is found on food security issues. India stood firm dismissing dire warnings by rich nations over the future of the multilateral forum.

Notwithstanding the failure of WTO members to reach a consensus on TFA to simplify global customs rules, India today said it remains committed to the pact and will continue to pursue its proposal to find a permanent solution to its food security issues. India also offered to help find a negotiated solution to its proposals on food security stockholdings that led to WTO’s failure to meet a 31 July deadline for wrapping up the trade facilitation agreement (TFA).

Negotiators in Geneva warned of consequences over India’s refusal to agree to the deadline that would have taken the TFA, aimed at simplifying customs procedures and cutting transaction costs, into the WTO rulebook. The talks remained deadlocked after India stuck to its stand that nations must simultaneously find a permanent solution to proposals on food security, which it says are the priority of poorer countries.

India believes progress on TFA has been quicker than that over its proposal on food security—a departure from WTO’s practice of single undertaking, under which all parts of an agreement move together. At the heart of the problem is a WTO rule that caps subsidies to farmers in developing countries at 10% of the total value of agricultural production, based on 1986-88 prices. Developing countries complain that the base year is outdated and that they need to be given leeway to stock enough grains for the food security of millions of their poor.

The TFA is meant to simplify customs procedures, facilitate the speedy release of goods from ports and cut transaction costs. India has been insisting that it would not agree to the TFA unless the entire Bali package, which includes allowing developing countries to buy food from farmers for food security needs, is simultaneously firmed up.



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