On 13 November 2014, Nirmala Sitharaman announced that India and the U.S. had finally reached an agreement on the issue of public food stockpiling which could help alleviate tensions at the WTO. Rajrishi Singhal, Senior Ggeoeconomics Fellow at Gateway House, comments on the impact of this development.
Statement:
“The India-U.S. agreement on the Trade Facilitation Agreement (TFA) is a shot in the arm for the WTO and provides continuity to multilateralism in trade negotiations.
While the details of the agreement have not been disclosed, it is safe to assume that the deal between India and U.S. will now allow trade negotiators to start the process of drafting a permanent solution to food security concerns of developing nations and least developed countries. This is likely to include a re-formulation of WTO’s agriculture rules, including upgrading the benchmark of 1986-88 food prices used for determining agricultural subsidies. Additionally, till a solution is reached, countries breaching WTO’s agriculture rules are unlikely to be reported to the dispute settlement mechanism.
In return, the TFA is now likely to sail through in WTO’s next General Council meeting, providing impetus for fresh investments in global trade infrastructure (such as ports), thereby creating a springboard for future trade growth.”
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