Obama, Modi highlight TFA impasse concerns, call for "urgent" WTO consultations

28 October 2014

US President Barack Obama and Indian Prime Minister Narendra Modi concluded their meeting in Washington on 30 September , directing their officials to “consult urgently” on the issues of the Trade Facilitation Agreement and public food stockholding.

The two government leaders said that they discussed both their “concerns” about the ongoing stalemate, as well as its potential effects of the multilateral trading system, according to a joint statement released following the meeting. 

“We had a candid discussion on [the] Bali ministerial of the WTO,” Modi acknowledged to reporters, referring to the December 2013 meeting where the TFA text was agreed. “India supports trade facilitation. However, I also expect that we are able to find a solution that takes care of our concern on food security.”

The Indian premier added that he believes “it should be possible to do that soon.”

Neither leader went into further detail in their remarks, and it remains to be seen what impact their statements may have on the ongoing WTO discussions.

Speaking at the New York-based Council of Foreign Relations one day before his meeting with Obama, the Indian premier had reiterated his stance that, while being in favour of the trade facilitation pact itself, advancing its implementation would need to go “hand-in-hand” with a result on food stockholding.

“It cannot be that you do this first and we will see the other later on,” he said.

Months of discord

The highly-anticipated summit in Washington, which was the first between the two leaders since Modi took office in May, had been looked to by trade observers as an opportunity for potentially resolving the conflict, which has dominated WTO talks in Geneva for the past couple of months.

Efforts to advance the implementation of the TFA – one of the main deliverables from last December’s WTO ministerial conference in Bali, Indonesia – screeched to a halt in late July, after India refused to back the adoption of a Protocol of Amendment that would have incorporated the text of the deal into the global trade body’s legal framework. (See Bridges Weekly, 31 July 2014)

At the time, India explained that it would not be able to support the Protocol until it saw sufficient signs of movement on developing a “permanent solution” on public food stockholding. This solution, it has said, should be reached by the end of this year.

The latter issue had been a subject of protracted discussions during the December meeting in Bali, with India having agreed to accept an “interim solution” on the subject while a permanent one was being negotiated in advance of the 2017 ministerial. (See Bridges Daily Update, 7 December 2013)

Under the terms of the interim solution, WTO members committed to “refrain from challenging through the WTO Dispute Settlement Mechanism, compliance of a developing member with its obligations under Articles 6.3 and 7.2 (b) of the Agreement on Agriculture (AoA) in relation to support provided for traditional staple food crops in pursuance of public stockholding programmes for food security purposes.”

This commitment is subject to certain conditions, such as the notification of these programmes to the WTO’s Committee on Agriculture by the developing country in question. The latter must also take steps to make sure that the stocks procured under these stockholding schemes do not distort trade, nor affect the food security of others.

Questions of trust

Back in Geneva, delegates have been meeting in various configurations in an effort to determine next steps.

WTO Director-General Roberto Azevêdo, as chair, reported to the Trade Negotiations Committee (TNC) on October 16 that in spite of intensive consultations “we have not found a solution to the impasse” more than two months after the Juli deadline had passed. “This could be the most serious situation that this organization has ever faced,” Azevêdo added, and while members should keep working for a solution to the current impasse, “we should also think about our next steps”.

At an earlier occasion, the WTO chief warned that a prolonged stalemate could have a “freezing effect” on the global trade body’s other work, including on efforts to advance the remaining parts of the Doha Round negotiations.

Sources say that meetings of the agriculture and non-agricultural market access committees have already shown signs of this difficulty, with members unable to agree on how – or whether – to advance any post-Bali work, given the current impasse. Many have reportedly raised the question of whether too much trust has been lost. (See Bridges Weekly, 18 September 2014)

During the global trade body’s annual Public Forum in early October, Azevêdo told a packed conference hall that the Bali deal – of which the TFA and interim solution on food stockholding were a part – is “this kind of construct that, when you touch one piece, everything moves.”

“The biggest gain from Bali was the recovery of trust,” he noted, given the long-running struggles of the Doha Round of trade talks, which have been underway since 2001. “We’re beginning to lose that trust once again, and we cannot let that happen.”

TF Committee hits snag

A meeting on September 29 of the Preparatory Committee on Trade Facilitation – which was established following the Bali ministerial, and is tasked with shepherding the trade pact into force – saw notable divergences among members over its future work.

The US said that discussions on TFA implementation are now at the General Council level, and should not be continued in the Preparatory Committee. Furthermore, the US delegation said that the Committee had completed its work and should thus not host further meetings – a statement that reportedly drew considerable pushback from other members, with some saying that the committee still has more to do.

Others reportedly said that it is up to the chair – Ambassador Esteban Conejos of the Philippines – to determine when the next meeting should take place, and asked him to get clarification as to whether a single member could block the hosting of a meeting. The ambassador had suggested 7 November as a tentative meeting date.

While Australia reportedly agreed that the situation is a political one, and the Preparatory Committee is a technical body, the EU during the TNC meeting on October 16 called for an engagement in the process and discussions as suggested by the chair of the Comittee.

 

ICTSD reporting; “Modi expresses support for trade facilitation deal,” THE HILL, 29 September 2014.

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