India's Counter Proposal Delays Signing of WTO's Trade Facilitation Agreement

World Trade Organization Director-General Roberto Azevêdo reported to WTO ambassadors on 31 July 2014 that despite intensive consultations, they have not been able to find a solution that would "allow us to bridge the gap” on the adoption of the protocol on the Trade Facilitation Agreement.

The proposed WTO deal seeks to ease worldwide customs rules. The deal would add US$1 trillion and 21 million jobs to the world economy.  

WTO ministers had already agreed the global reform of customs procedures known as "trade facilitation" in Bali, Indonesia, last Decembe. But they were unable to overcome the last-minute Indian objections and to have implemented into the WTO rule book by a 31 July deadline.

Azevêdo says there are two opposing sides that have caused the delay.

On the one side, there is the firm conviction, shared by many, that the decisions that ministers reached in Bali cannot be changed or amended in any way — and that those decisions have to be fully respected.

On the other side of the debate, there are some who believe that those decisions leave unresolved concerns that need to be addressed in ways that, in the view of others, change the balance of what was agreed in Bali.

According to the Economic Times, India has been insisting that it would not agree to the TFA unless the entire Bali package, which includes allowing developing countries to buy food from farmers for food security needs, is simultaneously firmed up.

"Our proposal is a solution, if they accept it. We are talking of substance and they are talking of process. There is some gap. They believe that July 31 is a dealbreaker, we do not believe that. We have made a very compelling proposal," a commerce department official told the Economic Times.

"This is not just another delay which can simply be ignored or accommodated into a new timetable. This will have consequences," says Azevêdo. "The consequences are likely to be significant."

Azevêdo urged members “to reflect long and hard on the ramifications of this setback.”

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