Trade facilitation pact ratification

The Cabinet has approved a proposal for ratification of the Trade Facilitation Agreement (TFA) of World Trade Organization (WTO), aimed at easing customs rules for expediting global trade flow of goods.

• To facilitate domestic coordination and implementation of the TFA, the Cabinet has also cleared the proposal to set up a National Committee on Trade Facilitation (NCTF) to be jointly chaired by the commerce and revenue secretaries.
• These developments are also in consonance with India’s “Ease of Doing Business” initiative.

Background:

• The WTO member-countries in November 2014 adopted a “protocol of amendment” to incorporate the TFA on goods in the overall WTO Agreement.
• For the TFA to be operational, two-thirds (or 108) of the 162 WTO members will have to ratify it. However, only 69 countries have ratified it so far.

Implications of this move:

• Trade experts have said that ratifying the agreement so early could lead to India losing a bargaining chip to secure its interests. That includes finding a permanent solution to the issue of public stockholding for food security purposes and a mechanism to safeguard poor farmers from sudden import surge of farm products.
• However, dismissing the criticism, the government says the agreement will benefit the country.

Trade facilitation:

• The Trade Facilitation Agreement forms part of the Bali Package agreed by members at the Ninth Ministerial Conference in Bali.
• The agreement contains provisions for faster and more efficient customs procedures through effective cooperation between customs and other appropriate authorities on trade facilitation and customs compliance issues.
• It also contains provisions for technical assistance and capacity building in this area.
• 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.