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Trade Facilitation Agreement Back on Track After U.S.-India Deal

Friday, November 14, 2014
Sandler, Travis & Rosenberg Trade Report

A months-long impasse that delayed implementation of a multilateral agreement that could save international traders billions in customs and logistics costs was broken Nov. 12 when the United States and India announced a bilateral deal aimed at addressing New Delhi’s concerns about food security. The Trade Facilitation Agreement and a package of other trade liberalization initiatives that World Trade Organization members approved at a ministerial meeting in Bali last December now look set to move forward in the coming weeks.

According to a fact sheet from the Office of the U.S. Trade Representative, the U.S.-India agreement includes a concession from India that the TFA “should be implemented without conditions on the basis of a standard legal instrument for implementing new WTO agreements” (i.e., India will drop its objection to considering a protocol that would add the TFA to the codex of WTO rules). In return, WTO members will not challenge food security programs like India’s that may violate WTO rules against trade-distorting subsidies until a permanent solution regarding this issue has been adopted and will undertake an intensified program of work and negotiations toward such a solution in 2015. The Bali package, by contrast, gave WTO members four years to come up with a solution and had been interpreted by some as providing for a moratorium on WTO litigation only during that time.

The U.S.-India deal will be presented for consideration by the full WTO membership in the near future. WTO Director-General Roberto Azevêdo said that WTO members will also have to redouble their efforts to minimize the delays the impasse caused in carrying forward the post-Bali work program aimed at restarting the broader Doha Round negotiations. WTO members are expected to miss their original Dec. 31 deadline for approving a roadmap for that work.

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