8/10/2019 Mains 2014 Special 1

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Study materials available Political Science, Sociology, General Studies, Essay & CSAT Paper 1& 2

Z-block. 3007, 2nd

street, 13thmain road, Shanti Colony Road. Anna Nagar, Chennai-40.

Landmark: Adjacent to Natesan Institute. (Take 2nd

RIGHT from police booth).

1. What is WTO's Trade Facilitation Agreement & Controversy surrounding it?.

Why is India opposing it?

The trade facilitation pact reached in Bali, Indonesia, last year is meant to simplify customs

procedures, facilitate the speedy release of goods from ports and cut transaction costs - measures

that could benefit rich nations more than developing countries such as India.Agreed upon in Bali summit

Package for Least Development Countries (LCDs), Trade facilitation and agriculture.

In the meeting, the 160-member WTO had reaffirmed their commitment for duty free and

quota free market access for LCDs.

Controversy surrounding TFA

Trade facilitation agreement (TFA) is a trade protocol aiming to give a spur and do away with

the stumbling blocks in doing international trade between various countries.

The deadline to sign the agreement is July 31, 2014 and the deal has to come into force fully

by 2015.

It is being believed, especially by the

proponents of the agreement that deal

could add $1 trillion to global GDP

and also can generate 21 million jobs

by slashing red tape and streamlining

customs.

The developing country especially

India and South Africa wants that

before pushing for this TFA thing why WTO don't discuss and allay our concern on food

subsidy which is a lifeline for lakhs of BPL people in these countries.India's concern

India is maintaining its bullheaded approach because of two issues, food subsidies and

stockpiling of food grains.

India at present is running a massive food procurement programmes by providing minimum

supporting price to the farmers and giving subsidised food to lakhs of BPL families through

its public distribution system (PDS).

The new WTO agreement limits the value of food subsidies at 10 percent of the total food

grain production. India is flexing muscle on the issue because subsidies have been calculated

by WTO taking 1986 as base year into account which will largely affect food procurement

programme through MSP.

India is raising its concerns by saying that while US is providing 120 billion as agriculture

subsidy then why India can't give even one tenth (USD 12 billion) to their farmers.

India which is home to about 25 percent of the world's hungry, has a viewpoint that it is a

Government's responsibility and duty to ensure availability of proper food to its people.

Moreover, India's food programme is largely domestic so it doesn't distort global food trade.

The Indian sources say that once the TFA will be implemented it will be difficult to bargain

on the food subsidy thing and that is why India has this brazen attitude.

At the heart of the problem is a WTO rule thatcaps subsidies to farmers in developing countries at

10% of the total value of agricultural production,

based on 1986-88 prices. Developing countries are

complaining that the base year is now outdated and

they need to be given leeway to stock enough

foodgrains for food security of millions of their

poor.