In Geneva, the World Trade Organization (WTO) failed to reach a compromise with India and complete negotiations on the Trade Facilitation Agreement (TFA) by the deadline of July 31. Although an interim agreement was reached at the Bali Ministerial meeting last December, India insisted on a permanent agreement regarding the issue of public stockpiling for food security purposes before it would sign on to the TFA.

The TFA is a far-reaching global trade agreement meant to significantly reduce trade impediments. The draft agreement would require 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.

TFA’s Future Unclear

The interim agreement with India included a “peace clause” to protect it from legal ramifications for exceeding its limit of trade-distorting subsidies due to public stockpiling programs. The food security interim decision directed WTO members to come up with a permanent solution by 2017 to deal with such programs. The peace clause would stay in place until a permanent solution is reached, even if negotiations passed the 2017 deadline.

Many WTO members felt that the TFA would be implemented with little resistance after the success of the Bali Ministerial meeting. However, with the failure to ratify before the deadline, many are concerned about the future of both the TFA and the WTO.

India Hopeful for Continued Negotiations

Senior officials in India responded to these concerns by saying that they remain committed to the TFA and would be willing to continue negotiations to reach an agreement on food security.
“We expect that the (WTO) director general will call a meeting in September and we are ready to sign the deal in September itself, provided TFA and food security issues are passed together,” a trade official from India told Reuters. “We are quite hopeful for the deal.”

Despite these comments, it is unclear if the deal can be revived and what steps WTO members would need to take to move the pact forward.