"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 address our concerns," commerce & industry minister Nirmala Sitharaman told reporters. Details of the deal were not disclosed.
TOI was the first to report on November 7 that India, the US and EU were "close to some understanding" and would work for a final resolution at the WTO on its basis.
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, a statement from the US trade representative said.
Earlier, the "peace clause", which would have prevented action at the WTO, was to be in place for four years, raising fears that the developed countries would walk away with the trade facilitation pact without addressing India's concerns.
The decision will come as a major boost for the Narendra Modi government as the Bali agreement was one of the first issues red-flagged by it after assuming charge. The stand had come in for severe criticism from across the world and even within the country but the pact with the US reinforces Modi's image as a man who stays firm.
The India-US agreement comes ahead of the G20 meeting in Brisbane where the PM will meet US President Barack Obama and other global leaders. With the deal done, the world's 20 largest economies are expected to signal their commitment to free and fair global trade talks. Next week a team from the WTO is scheduled to visit India to assess its trade policies.
The deal gives India the flexibility to provide minimum support price and procure as much grain as it wants for its security programme without being challenged by other WTO members at the global trade body.
India has remained firm on its demand for a permanent solution to its concerns on subsidy paid during procurement of farm products. It had called for reworking the formula for calculating the subsidy ceiling saying it was based on old prices.
There were signals in recent days that New Delhi was willing to agree to a formulation that there will be no punitive action even in case of a breach of the 10% subsidy cap. A breach of the ceiling of 10% will hurt the ability of developing countries to maintain public stock holding of food grains for food security programmes.
Global trade talks have been deadlocked after India refused to agree to a trade facilitation agreement to usher in easier rules for goods to flow through ports and airports without its concerns on food security being addressed.
The revival of global trade talks and implementation of the Trade Facilitation agreement augurs well for the global economy and according to estimates has the potential to add $1 trillion to the sluggish world economy and create jobs.
Sources said India and the United States will "shepherd" the proposal at the WTO's general council which is scheduled to meet on December 11.
US Trade Representative Michael Froman welcomed the agreement between the United States and India on elements aimed at unlocking progress at the WTO.
Both countries have reached an understanding on implementation of a December 2013 WTO decision regarding specific food security programs maintained by some developing countries.
It also sets out elements for an intensified program of work and negotiations to arrive at such a permanent solution.
The agreement announced on Thursday between the United States and India paves the way for full implementation of the Trade Facilitation Agreement (TFA), the first multilateral trade agreement to be concluded in the history of the WTO. the USTR statement said.
"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, Froman said in a statement
"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," Froman said.
He said on the basis of the breakthrough with India, the US now looks 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."
No comments:
Post a Comment