India's Objections to the TFA and WTO Protocol

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July 29, 2014

    The World Trade Organization’s General Council meeting on July 24th and July 25th attempted to finalize the protocol that would establish the Trade Facilitation Agreement (TFA) as part of the World Trade Organization (WTO).  Although the protocol has a July 31, 2014 deadline, India is voicing its objections due to the country’s concerns regarding food security.  The TFA was part of the Bali Package, which was designed to create “faster and more efficient customs procedures through effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues.”

    India came forth with its specific demands that could prolong the annexation.  At the General Council meeting, India declared they want “to find a permanent solution on public stockholding for food security.”  In addition, the country wants to come to a “permanent solution” to the food security issue by December 31, 2014.  However, the Bali Package established the finalization date for 2017.  The WTO only planned on establishing the joint protocol between the TFA and the WTO by the end of this month.  India also wants “a similar approach” to be taken “on all other elements of the Bali Package notably the LDC [least developed country] issues” and requests that the General Council evaluate these changes this coming October.  

    Although the protocol was set to be agreed upon by July 31, 2014, it still must be ratified by two-thirds of the WTO member countries within one year to come into effect.  There are concerns that if the July deadline is not met, the package may unravel.

    Some of India’s concerns stem from the ‘peace clause’ that was established last December which “protects India from a legal challenge under the WTO Agriculture Agreement for breeching its limit on trade-distorting subsidies due to its public stockholding program.”  However, the clause does not effectively help the country, which is driving India’s objections.  The country desires a timely permanent solution that would “exempt stockpiling programs,” where the government purchases crops at higher rates and distributes the goods to those who cannot afford it.  The food security issue could be the deciding factor to the finalization of the TFA and WTO merger by the July 31st deadline.
 
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