Trade Facilitation Agreement
The World Trade Organization (WTO) is the only global
international organization which deals with the rules of trade between nations.
The organization officially commenced on 1 January 1995 under the Marrakech
Agreement, signed by 123 nations on 1994, replacing the General Agreement on
Tariffs and Trade (GATT). The goal of WTO is to help producers of goods and
services, exporters, and importers conduct their business.
Bali conference has broadly came out with these outcomes- Trade Facilitation
agreement- Agreement will attempt to reduce red-tape and streamline customs. It
will help in faster clearance of goods which are perishable in nature. It will
be legally binding agreement and also have coordinating bodies at national and
international level. This agreement needs a upgradtion of technology to reduce
the redtape. Least Developed Countries will receive the support to build the
capacities to implement the changes.
Development and LDC issues- Least developed countries (LDCs)
and developing countries would be given preferential treatment and market
access. Least-Developed Countries will be given Duty-Free and Quota-Free (DFQF)
Market Access. Operationalization of the Waiver Concerning Preferential
Treatment to Services and Service Suppliers of Least-Developed Countries -
allows preferential treatment to be given to LDCs for 15 years from date of
Agriculture- Covers food security in developing countries which includes
public Stockholding for Food Security Purposes, Export Competition etc.
Agriculture issue has become a problem area for the negotiations between the
developed countries and India. As per the original Agreement on agriculture (AoA),
agriculture subsidies were divided into three categories-
1. Green Box Subsidy
2. Amber box Subsidy
3. Blue box Subsidy
Out of all three only Amber box subsidies are considered as
subsidy which disrupts the trade balance. Subsidy on fertilizers, power etc.
comes under this kind of subsidy. It was agreed in original
Agreement-on-Agriculture that the developed and developing countries will have
to keep their Amber box subsidies within 5% and 10% of their agriculture
production in 1986-88 respectively. India has strongly opposed to this clause
because subsidies are calculated on the basis of prices of 1987-88. Input costs
have skyrocketed in these decades. But, De-minimus doesn’t consider inflation
factor. As a temporary relief to India’s demand a “peace clause” was agreed in
Bali summit. Therefore, as a measure of temporary relief, Bali summit enacted a
“peace clause” for the AoA. Peace clause has certain provisions which provide
temporary relief to India. According to this clause no member, can drag any
developing country to Dispute settlement mechanism of WTO for violation of De-minimus
limits in AoA. But developing countries should also fulfill some criteria like-
1. Subsidy is provided only for staple food crops .
2. Subsidy is used program which is related to public stockholding.
3. And also for the purpose of any program related to food security.
But “peace clause” provides only temporary solution till 2017 and developed
countries might not accept this clause as permanent solution.
In this context India refused to accept the Bali package
until a permanent solution for agriculture subsidy is provided. Indian
government has a legally binding food security act, 2013. Under this act Indian
government has to provide subsidies food for around 82 crore population. Right
to food is one of the fundamental human rights even united nation charter for
human rights accepts this right. Millennium development goals which talks about
nutrition and reduction in mortality can never be fulfilled if food security is
not provided to poor population of the country. And also subsidy given by
developed countries are much higher than that of developing countries e. g.
India provide 12 billion dollars subsidy for 500 million farmers and US provide
120 billion dollars to 2 million farmers. The G33, a group of developing
countries that coordinate on trade and economic issues also supported India’s
stand. At the end India has been able to convince that it contentions are valid.
India and the US settled the dispute that had paralyzed the WTO, and given the
way to reforms that are seen adding about $ 1 trillion to global trade.