After almost 11 months of nail-biting saga, the World Trade Organization (WTO) today signed the much-awaited Trade Facilitation Agreement (TFA) while agreeing to India’s demand for a permanent ‘Peace Clause’ until a final solution is agreed on the issue of food stockholding.
Following long hours of tense negotiations and last minute hiccups from Argentina and Pakistan, the GC today finally adopted three main decisions – signing of TFA protocol, extension of the ‘Peace Clause’ for an indefinite period and putting a deadline on other remaining commitments of the Bali package related to the poorer countries.
“With this decision today our chances of getting a permanent solution to the food stockholding issue gets a massive boost. Now we do not have to beg for a permanent solution. We are now in a position to negotiate an optimum solution to the issue,” a senior official, involved in the talks, told Business Standard.
This comes after India and US reached an understating earlier this month where the Americans assured support to India’s demand for a permanent ‘Peace Clause’ and in turn India agreed to sign the TFA, which it vetoed in July.
The TFA, which is expected to induce $ 1 trillion dollars into the global economy and create 21 million jobs, will now be open for ratification by all 160-member countries, post which it will be implemented by July 2015.
The BJP-led government, which came to power in May after a landslide victory, had vetoed adopting the process that will turn the TFA into a legally binding deal by the previously set deadline of July 31, 2014.
Since then the government had been insistent upon having a parallel agreement on public food stocks for its poor and marginal farmers.
A permanent ‘Peace Clause’ immunes India and other developing countries, which have a public stockholding programme, from any sort of challenges by other members even if they violate global rules on farm subsidies.
The so-called ‘Peace Clause’ also grants India the freedom to grant subsidies to its farmers without following any limit. The limit, as per WTO rules, is 10 per cent of the total production of those crops which are covered under the food stockholding programme.
Presently, India offer subsidies in the form of ‘minimum support price’ to rice, wheat and cereals.
However, the ‘Peace Clause’ does not come for free. India, along with other developing countries, have to adhere to some strict conditions to avail the interim measure.
Earlier, developing countries were given the ‘Peace Clause’ only for a period of four years or 2017, by which time it was also decided that a permanent solution to the public food stocks issue will be achieved. This was agreed during the ninth ministerial meeting in Bali, Indonesia in December 2013.