Economy

India may ratify WTO trade facilitation pact

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India’s interests could be hurt, say experts.

India is likely to ratify the World Trade Organisation’s (WTO) Trade Facilitation Agreement (TFA), aimed at easing customs rules to expedite trade flows, during the Nairobi meeting of the global trade body from December 15 to 18.

However, a matter of concern is that India might not take advantage of the entire range of flexibilities in the TFA available for similar developing countries to determine which commitment they will implement at what time, sources privy to the development told The Hindu.

Not using all the available safeguards could lead to greater chances of India finding it difficult to implement all its TFA-related commitments on time, thereby giving opportunities to other countries to drag it (India) to the WTO’s dispute settlement panel, they warned.

The sources said the flexibilities available in the TFA for developing countries, but which India may not use to the full extent, include the one allowing them to take sufficient time in implementing certain commitments and the provision to seek assistance or support from donor countries for capacity building.

In November last year, WTO member countries had adopted a “protocol of amendment” to make the TFA a part of the overall WTO Agreement. However, the TFA will become operational only after two-thirds of the members ratify it. So far, only 53 of the 162 member countries have done so.

Bargaining chip

New Delhi is planning to ratify the TFA as part of the government’s initiatives to attract more investment by improving India’s ranking in the World Bank’s “ease of doing business” report, the sources said. The government wants India to leapfrog its position from 130th this year (out of 189 countries) to the top 100 next year and then in the top 50 soon.

But given the persisting differences with the developed world on issues of high importance to India, ratifying the TFA so early will result in India losing yet another bargaining chip to secure its interests, the sources said.

The items being championed by India on behalf of the developing and the poor world, but still unresolved, include finding a permanent solution to the issue of public stockholding for food security purposes as well as measures to protect poor farmers from sudden import surges of farm products.

The sources said a Cabinet note on the issue of TFA ratification is being circulated among Ministries for their views. This is to help the Union Cabinet approve the move, if possible, by Wednesday or Thursday.

There is a push for the initiative from the “highest level” of the government, the sources said.

They said implementing such commitments as part of TFA require not only sufficient time but also a huge amount of investment.

Nepal blockade

Trade experts, requesting anonymity, said if India had already ratified the World Trade Organisation’s Trade Facilitation Agreement (TFA) without taking complete advantage of the leeway available to developing countries, it could have been, for instance, taken to the WTO’s dispute settlement panel by Nepal.

Nepal, they said, could have charged India with ‘violation’ of the TFA provisions on transit of goods, by recently “blocking and restricting” cargo bound for that land-locked country.

Kathmandu had alleged that India caused the blockade as part of measures to offer covert support to Madhesis (the ethnic group with linkages to India), a charge which New Delhi later denied.

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Printable version | Sep 16, 2019 6:45:20 PM | https://www.thehindu.com/business/Economy/india-may-ratify-wto-trade-facilitation-pact/article7955937.ece

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