India may ratify Trade Facilitation Agreement at WTO meet

7 Dec 2015 | Written by Gaurav ; Edited by Vaneet Randhawa
The Trade Facilitation Agreement

India may ratify the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO) during the WTO Ministerial Conference at Nairobi from Dec 15-18.

This will be the tenth Ministerial Conference attended by Trade Ministers of all WTO member nations.

Sources say a Cabinet note on TFA ratification is being circulated among various Ministries for their views so as to approve the move soon.

In context: The Trade Facilitation Agreement

WTO What is the WTO?

The World Trade Organization (WTO) was established in 1995 and is an international organisation that deals with the rules of trade between nations.

It is an evolution of its predecessor, the Global Agreement on Tariff and Trade (GATT) and it currently has 162 members.

The goal of the WTO is to help producers of goods and services, exporters, and importers conduct their business.

TFA Key points of the Trade Facilitation Agreement (TFA)

The TFA helps expediting the movement, release and clearance of goods including goods in transit and seeks to improve co-ordination between all trade related bodies.

The goal is to reform customs procedures and cut red tape.

The TFA provides technical assistance and capacity building for the same.

In November 2014, members formally adopted a Protocol of Amendment to insert TFA into the WTO protocols.

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When was the TFA agreed upon?

The Trade Facilitation Agreement was agreed upon in the December 2013 WTO Ministerial Meet held at Bali, Indonesia. It was one of ten agreements inked as a part of the "Bali Package".

2014India's stance on the TFA

India had agreed to sign the TFA in 2014, but refrained from doing so after the change in government.

The new government had an issue with a subsequent agreement in the Bali Package's Ministerial Decision on Public Stockholding for Food Security Purposes, which affected India's crop subsidies to farmers.

Analysts speculated that Modi may agree to sign TFA to increase foreign investment in India.

TFA could have put India in the dock

Trade experts state that if India had ratified the TFA earlier, Nepal could have taken India to the WTO dispute resolution panel for imposing an "economic blockade" in "violation" of TFA rules.

7 Dec 2015India may ratify Trade Facilitation Agreement at WTO meet

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23 Apr 2016India signs the Trade Facilitation Agreement

India announced that it had formally approved the WTO's trade facilitation agreement.

This agreement aims at boosting commerce by easing customs procedures.

Nirmala Sitharaman- India's Commerce and Industry Minister said the agreement would strengthen India's ongoing reforms to "bring in simplification and enhanced transparency in cross-border trade in goods."

India is the 76th WTO member to ratify the Trade Facilitation Agreement.

9 May 2016TFA may help India deal with export rejects

The Trade Facilitation Agreement may come to India's rescue while exporting agricultural products.

Currently, many countries such as those from the European Union flag or reject Indian consignments over quality issues.

Now, the TFA provides an option of second testing in case the first test shows an adverse result.

To improve transparency, countries are also required to make the list of testing laboratories public.

TFA to check pressure tactics of developed world

Developed countries often use export rejections and complaints as a pressure tactic and non-tariff measure to check imports from developing countries. In 2014, the EU had raised 199 notifications on Indian food items.