WTO clinches first global trade deal in its historyHT Correspondent and Agencies Geneva/New Delhi, November 27, 2014
First Published: 22:00 IST(27/11/2014) | Last Updated: 23:16 IST(27/11/2014)
Ending months of deadlock, the World Trade Organisation (WTO) on Thursday ratified a global deal to ease customs rules, making it the first agreement in the multi-lateral trade body’s history.
WTO director-general Roberto Azevedo (R) smiles next to spokesperson Ketih Rockwell before a special meeting of the General Council Preparatory Committee on Trade Facilitation at the WTO headquarters in Geneva. (Reuters Photo)
The agreement means the WTO will introduce new standards for customs checks and border procedures. Proponents say this will streamline the flow of trade around the world, adding as much as $1 trillion and 21 million jobs to the world economy.
In July, India had withstood mounting pressure from developed countries including the US, which had blamed New Delhi’s hard bargain strategy for the eventual collapse of the talks putting the WTO’s future on “uncertain ground.”
India, however, held the view that without a permanent solution on food subsidies, public stockholding programmes such as buffer stock of food-grains would be hampered.
Existing rules cap the value of food subsidies at 10% of the value of production. But due to the manner in which the support is calculated at prices of nearly three decades ago, many countries would find it difficult to stay within the limit potentially attracting strong penalties from the trade body.
India said this would affect its food security programme and food grain procurement through minimum support prices.
As part of the agreement, till such time the WTO members find a permanent solution on a formula to cap food stockpiling by government agencies for welfare schemes, no punitive measures will be pressed on countries for breaching the subsidy cap.
The roadmap for a permanent solution is expected by next year.
Prime Minister Narendra Modi and President Barack Obama’s personal intervention had helped India and the US resolve the row and get moving on the talks, US Trade Representative Michael Froman said earlier this week.
The reform package adopted on Thursday was agreed at a WTO meeting in Bali last December.