U.S.-India trade deal advances stalled WTO agreements

U.S.-India trade deal advances stalled WTO agreements
Geopolitics
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Eric Garcetti, Ambassador | U.S. Embassy in India

The United States and India have reached an agreement on measures aimed at resolving the deadlock in the World Trade Organization's (WTO) efforts to implement agreements from the December 2013 WTO Ministerial Conference in Bali. This development was announced in Washington, D.C., on November 14, 2014.

President Obama and Prime Minister Modi have been engaged in discussions about trade facilitation and food security, notably during their bilateral summit on September 30. Recently, negotiators from both countries worked intensively to address issues important to them and other WTO members.

The agreement will be presented to the full WTO membership soon and comprises two main elements:

Firstly, the U.S. and India are advancing the WTO's Trade Facilitation Agreement (TFA), which is the first multilateral agreement concluded since the inception of the WTO two decades ago. The implementation of this agreement should proceed without conditions using a standard legal instrument for new WTO agreements. If accepted by all WTO members, this approach will enable full multilateral implementation of the TFA, reducing costs and administrative burdens associated with moving goods across borders.

Secondly, both countries have reached an understanding regarding specific food security programs maintained by some developing countries. The bilateral agreement clarifies that a mechanism will remain in place under which WTO members will not challenge these food security programs under dispute settlement procedures until a permanent solution is agreed upon and adopted. It also outlines elements for an intensified program of work and negotiations to reach such a solution.

These initiatives were part of significant trade agreements made at the WTO’s 9th Ministerial Conference in Bali. Although momentum was disrupted in July 2014 due to missed deadlines related to TFA implementation, this bilateral agreement marks progress toward restoring confidence in the WTO's negotiating function.

Since decision-making within the WTO requires consensus among all members, these elements agreed upon by the United States and India will be discussed with all members to reach final decisions soon.