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The Big Picture – Has the India-US deal cleared way for WTO pact?


India and the United States have reached an agreement on how India will use its food stocks until a permanent settlement is arrived.

This agreement is expected to pave way for signing Trade Facilitation Agreement at WTO which had got stuck following India’s objections.

It would be very difficult for any government in India to risk the Food security commitment in the country.

US was previously criticising India for its stand.

It is also being said that the US has signed this bilateral agreement to avail some hidden advantages like more access in the Indian Market for its products.

Almost all the countries are supporting the signing of Trade Facilitation Agreement.

The US was in lead in the food issue at the WTO.

In terms of interests in Agriculture or Agricultural exports or subsidies, the US and Europe have greater commercial interests.

India’s apprehension was that once the agreement was signed, we would not have the leverage necessary to get a reasonable solution on the agricultural side.

There are no threats of sanctions after 2017 to India if it does not sign FTA.

A little more clarity was required on the bilateral agreement which was signed.

Once the TFA is signed India would lose its bargaining power and it is a cause of concern. And it would become difficult to arrive at a permanent solution.

Peace clause comes with certain conditionalities and hence there are some apprehensions about it.

India succeeded in retaining the peace clause in the Agreement.

India’s subsidy regime is totally different from US’s subsidy regime.

To compete in the new regime India has to come up with new farm policy.

Third world countries would lose much more than they gain by signing the FTA.