Union Cabinet gives approves TFA of the WTO

Union Cabinet has approved a proposal to notify the Trade Facilitation Agreement (TFA) of the World Trade Organization (WTO). Decision in this regard was taken by the Union Cabinet meeting chaired by the Prime Minister Narendra Modi in New Delhi as per India’s consonance of ‘ease of doing business’ initiative. The proposal regarding ratification & acceptance of the instrument of acceptance of protocol of TFA to WTO Secretariat was also approved by the Union Cabinet. The National Committee on Trade Facilitation The Union Cabinet also has decided to constitute National Committee on Trade Facilitation (NCTF) to facilitate both domestic co-ordination and implementation of the provisions of the Agreement. NCTF will be set up under the Joint Chair of Secretary under the aegis of Union Ministry of Commerce and Industry’s Department of Revenue & Secretary, Department of Commerce. What is Trade Facilitation Agreement (TFA)? The TFA is the WTO’s 1st ever multilateral accord that aims to simplify customs regulations for the cross border movement of goods. It was outcome of WTO’s 9th Bali ministerial package of 2013. The agreement includes provisions for Lowering import tariffs and agricultural subsidies: It will make it easier for developing countries to trade with the developed world in global markets.
Abolish hard import quotas:

• Developed countries would abolish hard import quotas on agricultural products from the developing world and instead would only be allowed to charge tariffs on amount of agricultural imports exceeding specific limits.

Reduction in red tape at international borders:

• It aims to reduce red tapism to facilitate trade by the reforming customs bureaucracies & formalities.


• The TFA shall enter into force for the notified members upon acceptance by the two-3rd (107 countries) WTO Members.


• So far 69 countries of the 162 WTO members have ratified this pact. If this agreement is properly implemented, it may create US One trillion dollars’ worth global economic activity which may add 21 million new jobs & lower the cost of doing international trade by 10 to 15 percent.

Background:

Earlier Union Government had refused to ratify TFA till its concerns about public stock holding for food security are resolved. But in order to address India’s concerns WTO had agreed to amend the Bali agreement, providing India an indefinite reprieve on food stock holding.

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Union Cabinet gives approves TFA of the WTO