WTO Current Affairs

Trade-distorting farm subsidies must go: India-China

India and China have jointly submitted proposal to World Trade Organisation (WTO) calling for elimination of most trade-distorting farm subsidies by developed countries. These farm subsidies are known as known as Aggregate Measurement of Support (AMS) or ‘Amber Box’ support.

Significance of proposal

The proposal assumes importance in view for consideration of other reforms in domestic support negotiations in view of ongoing negotiations for upcoming 11th Ministerial Conference (MC) of WTO to be held in Buenos Aires (Argentina) in December 2017. It counters the efforts of some WTO member countries targeting subsidies given by developing economies to their poor farmers while letting the developed rich nations retain their huge farm subsidies. It argues that AMS have to be eliminated before any other reform in global farm trade can be taken up for consideration.

Features of Joint proposal

Under the AMS regime of WTO, farm subsidies provided by developed countries are over 50% and in some cases more than 100% of value of production concerned, while developing countries are forced to limit it within 10% of the value of production. It is resulting in a major asymmetry in the rules on global agricultural trade.

Developed countries like US, EU, Japan, Canada, Switzerland, and Norway continue to distort global farm trade by safeguarding their exclusive entitlements on AMS which they had secured in previous Uruguay Round of trade negotiations.

Developed countries are consistently providing trade-distorting subsidies to their farmers at levels much higher than ceiling applicable to developing countries. It counters the efforts by some countries to target the subsidies of the developing countries while letting the developed countries retain their huge farm subsidies.

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Government releases National Trade Facilitation Action Plan

The Union Government released the 76 point National Trade Facilitation Action Plan (NTFAP). It was released by Union Finance Minister Arun Jaitley in New Delhi.

The NTFAP has been adopted by the National Committee on Trade Facilitation (NCTF), reflecting Government’s commitment to implement the Trade Facilitation Agreement (TFA).

Key Facts

Aims of the action plan: Transform cross border clearance ecosystem through efficient, transparent, risk based, co-ordinated, digital, seamless and technology driven procedures supported by state-of-the-art sea ports, airports and land borders.

Objectives of the action plan: Achieve improvement in ease of doing business by reduction in cargo release time and cost, transparent and predictable legal regime, move towards paperless regulatory environment and improved investment climate through better infrastructure.

Activities listed in the Action Plan: It lists out specific activities which would be carried out by all regulatory agencies like Customs, Drug Controller, Plant Quarantine, FSSAI, DGFT etc. in time bound manner. The co-ordination among all the stakeholders is the key to achieve the objective of Trade facilitation.

It not only covers the activities coming under the TFA but also goes beyond the ambit of TFA, defined as TFA Plus category. It covers many activities in the areas of infrastructure augmentation, particularly the road and rail infrastructures leading to ports, airports, Land Customs stations, ICDs that cuts across all stakeholders for which various ministries like Civil Aviation, Shipping, Railways, Home Affairs, Road transport and Highways, Finance, Commerce etc have been assigned specified targets. All actions falling under the plan have been categorised by prioritising the activities into short term, mid-term and long-term activities.

Monitoring of the plan: The plan will be monitored by the Steering Committee (the operational arm of the NCTF) chaired by the Revenue Secretary and the Commerce Secretary. Further it will be reviewed by the Cabinet Secretary.

Background

Earlier in August 2016, the Union Government had constituted NCTF headed by the Cabinet Secretary in accordance with Article 23.2 of the WTO-TFA. It comprises stakeholders from the Government and the private sectors including trade community. It is headed by Cabinet Secretary.

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