World Trade Organization (WTO) members failed last week to overcome objections from India that vetoed the implementation of the Trade Facilitation Agreement (TFA), an integral part of the WTO Ministerial agreement adopted last December. Ignoring the commitments it made at the Bali ministerial, India insisted that a permanent agreement must be reached on public stockholding for food security purposes before it would sign on to the TFA.

The TFA is an important advancement to reducing trade impediments since it requires WTO members to harmonize trade documents and streamline procedures for shipping products across borders and at ports. The benefits of the TFA were estimated to be worth up to $1 trillion per year to the global economy — generating up to 21 million jobs.

Previously, India had demanded inclusion of an interim agreement concerning public stockholding of staple food crops for food security purposes as part of the WTO Ministerial agreement. The food security interim decision directed WTO members to come up with a permanent solution by 2017 to deal with such programs.

This interim agreement included a so-called “peace clause” to protect India from a legal challenge under the WTO Agriculture Agreement for breaching its limit of trade-distorting subsidies due to its public stockholding programs. Even if WTO members missed that deadline, the peace clause would stay in place until a permanent solution was reached. But the peace clause was negotiated by the previous Indian government, and the new government apparently wanted further assurances that the peace clause would stay in place if members could not agree on a permanent solution.

WTO Director General Roberto Azevedo made last ditch efforts to find a compromise on the food security issue, but was unable to reach agreement with key WTO members and India. The failure to ratify the implementation of TFA puts the Bali agreement in jeopardy and it is unclear what, if any, steps are available to WTO members to move the process forward. It also bodes poorly for the future of the Doha Round and WTO in general.