India has reached an agreement with the United States on public stockpiling of food, paving the way for the implementation of a global trade facilitation deal that has been stalled for months.
The proposals will be reviewed by the World Trade Organization’s General Council and its approval would clear the way for India to sign a protocol enabling implementation of the trade accord.
India had called for a permanent “peace clause” to protect its food stockpiling scheme, subject to certain conditions, until a permanent solution on the issue was found at the WTO. Under the Bali accord, the peace clause would have expired after four years.
US-India agreement means that the trade facilitation agreement can be implemented without conditions. It made clear that WTO members would not challenge food security programs under WTO dispute settlement procedures until a permanent solution had been agreed and adopted.
At the end of July 2014, Prime Minister Narendra Modi had pulled the plug on implementing a Trade Facilitation Agreement struck in Bali in 2013. India had wanted indefinitely to extend a ‘peace clause’ to protect a subsidised food distribution scheme until the WTO can strike a definitive deal on stockpiling.
Under the pact with Washington, India will lift a veto on a global agreement on streamlining customs rules that is likely to add $1 trillion to the world economy as well as 21 million jobs, 18 million of them in developing countries. USA had been the principal opponent of India’s food scheme on the grounds that it distorted trade.