Info Service on WTO and Trade Issues (Nov14/04)
India resolve impasse on TFA/food security issue
Published in SUNS #7916 dated 14 November 2014
Geneva, 13 Nov (Kanaga Raja) -- Both the United States and India officially
announced Thursday that they have reached an agreement aimed at breaking
the current deadlock at the World Trade Organisation (WTO) over the
issue of public stockholding for food security purposes and the implementation
of the Trade Facilitation Agreement (TFA).
The announcement of the breakthrough came in separate press releases
from the Office of the US Trade Representative (USTR) and the Ministry
of Commerce and Industry of India.
In the statement issued by the Press Information Bureau, Indian Commerce
and Industry Minister, Ms Nirmala Sitharaman, said: "We are extremely
happy that India and the US have successfully resolved their differences
relating to the issue of public stockholding for food security purposes
in the WTO in a manner that addresses our concerns."
This will end the impasse at the WTO and also open the way for implementation
of the Trade Facilitation Agreement, she added.
She expressed confidence that the membership will take the matter
forward in the WTO in a constructive spirit, saying that this would
be an important contribution by the WTO reflecting its commitment
She urged the WTO membership to take this forward in the General Council
on behalf of the Ministerial Conference, and pave the way to spurring
the WTO to more such successes.
In a separate statement, USTR Michael Froman welcomed the agreement
that was reached between the US and India, saying that this agreement
paves the way for full implementation of the TFA.
"On the basis of this breakthrough with India, we now look forward
to working with all WTO Members and with Director-General Roberto
Azevedo to reach a consensus that enables full implementation of all
elements of the landmark Bali Package, including the Trade Facilitation
Agreement," he said.
An accompanying fact-sheet issued by the Office of the USTR cited
two key elements of the agreement, which it said will be presented
for consideration by the full WTO membership in the near future.
The first being that the TFA "should be implemented without conditions",
on the basis of a standard legal instrument for implementing new WTO
agreements, and that if accepted by the full WTO Membership, this
approach will enable fully multilateral implementation of the TFA.
On the second element pertaining to the understanding reached between
the US and India on implementation of the Bali decision regarding
public stockholding for food security purposes, the fact-sheet said
that the bilateral agreement makes clear that a mechanism under which
WTO Members will not challenge such food security programmes under
WTO dispute settlement procedures "will remain in place until
a permanent solution regarding this issue has been agreed and adopted."
[According to the Bali Ministerial Decision of 7 December 2013 on
public stockholding for food security purposes, WTO Members agree
to put in place an interim mechanism, and to negotiate on an agreement
for a permanent solution, for the issue of public stockholding for
food security purposes for adoption by the 11th Ministerial Conference
[In the interim, until a permanent solution is found, and provided
that the conditions set out are met, Members shall refrain from challenging
through the WTO Dispute Settlement Mechanism, compliance of a developing
Member with its obligations under Articles 6.3 and 7.2 (b) of the
Agreement on Agriculture (AoA) in relation to support provided for
traditional staple food crops in pursuance of public stockholding
programmes for food security purposes existing as of the date of this
Decision, that are consistent with the criteria of paragraph 3, footnote
5, and footnote 5&6 of Annex 2 to the AoA when the developing
Member complies with the terms of this Decision.]
According to the USTR fact-sheet, the bilateral agreement also sets
out elements for an intensified programme of work and negotiations
to arrive at such a permanent solution.
The fact-sheet further said that the elements agreed between the US
and India will now be discussed with the full WTO membership in the
interest of arriving at final and simultaneously-agreed decisions
in the very near future.
In her statement, Indian Commerce and Industry Minister Sitharaman
said that India is a strong supporter of the multilateral trading
system and is committed to strengthening it and ensuring that the
WTO remains a key pillar of the global economic edifice.
"The WTO is in the best interest of developing countries, especially
the poorest, most marginalised ones among them and we are determined
to work to strengthen this institution," she added.
According to the Minister, the principles of non-discrimination, predictability,
transparency and, most importantly, the commitment to development
underlying the multilateral trading system are too valuable to lose.
"Plurilateral trading arrangements, among a few, cannot substitute
the multilateral system and are also against the spirit of the fundamental
WTO principles of transparency and inclusiveness," she stressed.
The Doha Development Agenda (DDA) which was agreed in the year 2001
is the very first round dedicated to development. The agenda is a
fine balance between market access and development issues.
"We supported the Bali Package but when subsequent developments
belied that hope, India had no option but to seek a course correction.
India, therefore, took the stand that till there was an assurance
of our concerns being addressed, it would be difficult to join the
consensus on the Protocol of Amendment for the Trade Facilitation
Agreement," the Indian Minister explained.
She noted that the relationship between international trade and food
security has been the subject of much debate, and so also, the role
of WTO rules in enabling and promoting food security.
"While the relevant WTO rules recognise food security concerns,
their primary focus is to liberalise agricultural trade rather than
to ensure food security. However, the fact is that some of these rules
are proving to be a hindrance to food security efforts."
The Minister said that India has reiterated its commitment to the
Trade Facilitation Agreement a number of times. "We recognise
its value for trade and for that reason we agreed to it in the larger
interest of global trade."
However, she said, for developing countries the benefits may not be
commensurate with the associated costs. Implementation of the rest
of the Bali Decisions will give some comfort to the developing countries
and LDCs, even though most of the non-binding decisions do not hold
out the promise of substantial gains for these countries.
She underlined that India will continue to work for the implementation
of the Bali Package and the DDA.
"While there was much media debate and concerns expressed regarding
the impact of India's stand in the WTO, it has undeniably resonated
across the world. Many countries saw merit in what we were asking
for. India was not alone or isolated. Others were simply not speaking
up," Ms Sitharaman pointed out.
In his statement on the agreement reached between the US and India,
USTR Froman said that: "A year ago at the WTO Ministerial Conference
held in Bali, all WTO Members, including the United States and India,
celebrated the achievement of the TFA and a broader package of measures
addressing concerns of all WTO Members. Efforts to put the TFA in
place were dealt a setback in July, when a small group of countries,
led by India, raised concerns about the status of the WTO's work on
food security issues and blocked consensus on implementing the TFA.
We have overcome that delay and now have agreement with India to move
forward with full implementation."
"With the WTO confronting a mounting crisis of confidence, President
Obama and Prime Minister Modi held productive discussions on this
issue, including during the Prime Minister's visit to Washington in
September. In recent days, officials of both governments worked intensively
and reached an agreement that should give new momentum to multilateral
efforts at the WTO. In doing so, the United States and India reaffirm
their joint commitment to the success and credibility of the WTO,"
In a statement issued from Brussels, European Union Trade Commissioner
Cecilia Malmstrom, welcoming the news that the US and India have resolved
their differences on the issue, said: "We have achieved an important
breakthrough which will lead to the full implementation of the landmark
Bali package, including the Trade Facilitation Agreement, the first
global trade deal agreed in the World Trade Organisation."
She added that implementation of the TFA will allow the WTO to resume
work on other key aspects of the Bali deal, including advancing on
the preparation of a work programme for the DDA. "We look forward
to resuming the discussions in the WTO in the coming days, to turn
these agreements into action."
In a press release also issued on Thursday, WTO Director-General Roberto
Azevedo welcomed the US-India agreement, saying that this breakthrough
"represents a significant step in efforts to get the Bali package
and the multilateral trading system back on track."
"It will now be important to consult with all WTO Members so
that we can collectively resolve the current impasse as quickly as
possible," he added.
Meanwhile, the regular WTO Committee on Agriculture is scheduled to
meet on Thursday to discuss a range of agenda items, including implementation
of the Bali outcomes. +