The World Trade Organization finally signed the much-waited Trade Facilitation Agreement. This trade agreement deal is considered as historic for multilateral trade organization.
This landmark agreement approved a framework for implementation of a global pact for easing customs norms after acceding to India’s demand to remove constraints on food stockpiling. Experts say streamlining the flow of trade will add as much as $1 trillion and 21 million jobs to the world economy.
The agreement would now need to be ratified by governments of individual member countries, including India, for coming into effect which is expected some time next year.
The WTO’s General Council, the highest decision making body met in Geneva on Thursday and accepted India’s demand for extending the peace clause till a permanent solution is found for its food stockpiling issue.
As per the Bali agreement, the peace clause was to continue till 2017 only. The extension is crucial for India to meet over Rs 1 lakh crore a year food security programme, which needs 62 million tonnes of foodgrain in a year.
The US has welcomed the WTO decision on enabling full implementation of the Trade Facilitation Agreement (TFA), the first multilateral trade agreement in the organisation’s 20-year history.
“The WTO has taken a critical step forward by breaking the impasse that has prevailed since July,” US Trade Representative Michael Froman said in a statement.
“I am pleased that the United States was able to work with India and other WTO members to find an approach that preserved the letter and spirit of the package of decisions reached at last year’s Bali Ministerial Conference,” he said.
Froman noted that US recently worked with India to break the impasse reached “on July 1, when a small group of WTO Members blocked adoption of the Protocol of Amendment for the TFA by the deadline established in the Bali Package.”
The WTO General Council adopted decisions Thursday which “endorse the approach agreed upon by the United States and India,” he said.
These include “a decision on public stockholding for food security, clarifying that a ‘peace clause, against legal challenges to certain public stockholding programmes, will continue until a permanent solution on such programmes is agreed and adopted,” he noted.
Also reached was a decision to extend until July 2015 the deadline for developing a work programme covering all remaining issues in the Doha Round of negotiations.
The TFA “has the potential to fundamentally reform global customs practices and substantially reduce the costs and time associated with goods crossing borders,” Froman said.
“It’s a perfect example of how breaking down barriers to trade can unlock new opportunities for developed and developing countries alike, and it’s a particularly important win for small and businesses in all countries,” he said.
“With this win under the WTO’s belt, we can once again focus our efforts on revitalising the organization’s core negotiating functions,” Froman said.
The WTO move on TFA comes after US-India agreement on it last week.