The US and India have reached an agreement that will ensure the full implementation of the world trade organisation's (WTO) trade facilitation agreement (TFA) to help ease customd rules.
This is the first multilateral trade agreement to be concluded in the history of the WTO, said a statement from the US Trade Representative Michael Froman.
According to the agreement, the two countries have agreed upon a 'peace clause' on food security till they can find a permanent solution. A peace clause gives legal security to member countries and protects them from being challenged under other WTO agreements, reports the Hindustan Times.
"In recent days, officials of both governments worked intensively and reached an agreement that should give new momentum to multilateral efforts at the WTO."
This agreement will help in making trade easier, faster and cheaper by making systems transparent and reducing red tape.
India had refused to sign TFA in July, saying it did not want to sign the agreement till its concerns on food security were addressed. The US had voiced its disappointment on India's stand.
Speaking about the agreement, Froman said: "Efforts to put the TFA in place were dealt a setback in July, when a small group of countries, led by India, raised concerns about the status of the WTO's work on food security issues and blocked consensus on implementing the TFA. We have overcome that delay and now have agreement with India to move forward with full implementation.
"With the WTO confronting a mounting crisis of confidence, President Obama and prime minister Modi held productive discussions on this issue, including during the prime minister's visit to Washington in September. In recent days, officials of both governments worked intensively and reached an agreement that should give new momentum to multilateral efforts at the WTO. In doing so, the United States and India reaffirm their joint commitment to the success and credibility of the WTO."
According to present rules, the value of food subsidies has been capped at 10% of the value of production. However, the support is calculated according to prices of more than three decades earlier, which make it difficult for many countries to stay within the limit.
