<p>India’s decision to block a new global customs rules at the WTO meeting in Geneva on Friday followed Prime Minister Narendra Modi’s direction to negotiators that liberalisation of global trade should not be at the cost of food subsidies in the country. <br /><br /></p>.<p>Even as the US and the European Union have warned that non-adoption of the Trade Facilitation Agreement (TFA) by July 31 would threaten global trade reforms, India stood firm to its stand that whatever was agreed at the Bali meeting in December last year could not be sacrificed for the sake of meeting deadlines.<br /><br />The TFA seeks to speed up movement of goods among countries by cutting down bureaucratic red tape. However, a clause in the TFA says farm subsidies cannot be more than 10 per cent of the value of agricultural production. It also allows WTO members to challenge any country that exceeds the subsidy cap and also go on to impose trade sanctions on that country.<br /><br />A large section of the international community had expected the Modi government to cut down on subsidies to spur economic growth. However, new regime has decided to opt for continuity and strongly backed the previous government’s position on WTO talks.<br /><br />The TFA calculates the 10 per cent cap on farm subsidies based on the 1986-88 food prices. India has been demanding a revision in the base year citing inflation. An inkling of international community not agreeing to India’s view was felt at the recent G-20 talks in Australia where the host country did not clearly articulate New Delhi’s opposition to the standalone agreement on trade facilitation at the WTO.<br /><br />Commerce Minister Nirmala Sitharaman, who attended the G-20 meeting in Sydney, had pointed out that India’s views had not been articulated in the summation of the meeting. India is planning to lodge a protest against Australia in this regard.<br /><br />The TFA, which seeks to simplify customs procedure, is being pushed by the US and other developed nations as part of efforts to boost their flagging economies. The trade pack would give these nations easy access to global markets through uniform customs procedures. <br /></p>
<p>India’s decision to block a new global customs rules at the WTO meeting in Geneva on Friday followed Prime Minister Narendra Modi’s direction to negotiators that liberalisation of global trade should not be at the cost of food subsidies in the country. <br /><br /></p>.<p>Even as the US and the European Union have warned that non-adoption of the Trade Facilitation Agreement (TFA) by July 31 would threaten global trade reforms, India stood firm to its stand that whatever was agreed at the Bali meeting in December last year could not be sacrificed for the sake of meeting deadlines.<br /><br />The TFA seeks to speed up movement of goods among countries by cutting down bureaucratic red tape. However, a clause in the TFA says farm subsidies cannot be more than 10 per cent of the value of agricultural production. It also allows WTO members to challenge any country that exceeds the subsidy cap and also go on to impose trade sanctions on that country.<br /><br />A large section of the international community had expected the Modi government to cut down on subsidies to spur economic growth. However, new regime has decided to opt for continuity and strongly backed the previous government’s position on WTO talks.<br /><br />The TFA calculates the 10 per cent cap on farm subsidies based on the 1986-88 food prices. India has been demanding a revision in the base year citing inflation. An inkling of international community not agreeing to India’s view was felt at the recent G-20 talks in Australia where the host country did not clearly articulate New Delhi’s opposition to the standalone agreement on trade facilitation at the WTO.<br /><br />Commerce Minister Nirmala Sitharaman, who attended the G-20 meeting in Sydney, had pointed out that India’s views had not been articulated in the summation of the meeting. India is planning to lodge a protest against Australia in this regard.<br /><br />The TFA, which seeks to simplify customs procedure, is being pushed by the US and other developed nations as part of efforts to boost their flagging economies. The trade pack would give these nations easy access to global markets through uniform customs procedures. <br /></p>
