WTO approves trade facilitation agreement (TFA)
The World Trade Organization (WTO) approved the first world-wide trade deal- Trade Facilitation agreement (TFA). It was approved by WTO’s 160 member nations in Geneva after months of deadlock.
This announcement comes after India and the US earlier had resolved their differences over public stockholding of food in November 2014.
The approval of TFA deal will possibly help to meet a permanent solution for the public stockholding of food in the WTO’s Ministerial Conference 2015 as 160 members agreed to make all efforts to find a permanent solution to the issue.
The Trade Facilitation Agreement (TFA) is the WTO’s first-ever multilateral accord. It was outcome of 9th Ministerial Conference of WTO for broader reform to boost global trade held in Bali, Indonesia in December, 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 reforming customs bureaucracies and formalities.
If this agreement is properly implemented, it may create US$1 trillion worth of global economic activity which may add 21 million new jobs and lower the cost of doing international trade by 10–15 percent.
Tags: Current Affairs - 2017