Trade Compliance

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EU Sets Make or Break Deadline on Trade Facilitation Agreement

Posted October 17, 2014

Hoping to push India into supporting a World Trade Organization (WTO) global trade deal struck last year or risk being left out of a proposed agreement to ease worldwide customs rules, Italy’s deputy industry minister Carlo Calenda, the chairman of EU trade ministers, set a deadline of next Tuesday for the country to re-consider its position.
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In blocking the first global trade reform in two decades, which according to some estimates would add $1 trillion and 21 million jobs to the world economy, India faces the almost certain alternative of being excluded in future from multilateral trade facilitation arrangements involving a coalition of countries willing to participate in the process of streamlining customs clearance and eliminating costly barriers to global trade.

After having spent months ambiguously waffling over reforms it previously committed to in Bali last year that would clearly benefit the country’s importers and exporters, India now insists that, in exchange for signing the trade facilitation agreement, it must see more substantial progress on a parallel pact allowing it more latitude in the enforcement of domestic food security policies that it regards as vital, but which ostensibly violate WTO policies on the subsidization and stockpiling of food grains.

Some see resolving the current impasse over the controversial issue as pivotal to the future direction of the WTO project and possibly even a definitive end to the viability of developing sweeping global trade agreements in favour of a new approach involving plurilateral and regional arrangements that better reflect the priorities of like-minded participants.

“What is at stake is not only our ability to reach agreements, but also to implement what has been clearly agreed. There should be no mistake, the current stalemate will have consequences on the WTO and the multilateral system,” the EU’s ambassador to the WTO recently told the Financial Times.