Delay in WTO trade facilitation pact leaves countries worried

The Association of Southeast Asian Nations (Asean) on Wednesday expressed concern over delay in implementing the World Trade Organization's (WTO) Trade Facilitation Agreement (TFA) that seeks to smoothen global customs rules, as was agreed during the during the Bali Ministerial last year. Members also agreed to expedite talks on the Regional Comprehensive Economic Partnership Agreement (RCEP).

"The ministers expressed concern about the inability of WTO members to implement the Bali Package in accordance with the Ministerial decision in Bali," said the joint statement issued after the meeting between Asean economic ministers, Australia, China, India, Japan, Korea, New Zealand, Russia and US who met here on Wednesday as part of the East Asia Summit.

It has to be noted here that barring India, all the countries present here and the Asean grouping had agreed to sign the TFA Protocol into a legal agreement under WTO in July. Only India, Bolivia, Cuba and Venezuela had decided to veto it, as they wanted a parallel agreement on public stockholding for food security purposes.

Interestingly, the joint statement further stated that the ministers called for a "comprehensive and balanced implementation" of the Bali Package, while adhering to the concept of single-undertaking thereby including all aspects of the original Doha Development Agenda that started in 2001.

It is learnt that a three-hour negotiation between India and other countries ensued while firming up the joint statement. Apparently, India did not want TFA to be mentioned in the statement. As a result, neither TFA nor public stockholding were inducted in the statement in an effort to satisfy all.

However, it seems the US had yielded substantial pressure tactics to include TFA as part of the statement calling for its early closure, officials in department of commerce told Business Standard, who refused to be identified.

US Trade Representative Michael Froman had even sought a bilateral meeting with Minister of State for Commerce and Industry Nirmala Sitharaman on the sidelines of the talks, which had to be cancelled due to her absence.

Bilateral meetings with China and Japan were also called off.

Meanwhile, the second ministerial meeting of RCEP was held here later in the day. In the absence of Sitharaman, India was represented by Sumanta Chaudhuri and Ravi Capoor, both joint secretaries in Trade Policy Division and Asean, respectively, at the department of commerce.

The ministerial meeting took up matters related to trade in goods, services and investment amongst the RCEP member countries that includes Asean (Cambodia, Indonesia, Singapore, Laos, Vietnam, Malaysia, Myanmar, Brunei, Thailand and the Philippines) + six (Australia, China, India, Japan, South Korea and New Zealand).

Apparently, India had been dragging the RCEP negotiations because it is apprehensive of giving tariff free access to China. This is mainly because Indian industry and exporters had been against RCEP, as it does not have the wherewithal to face the Chinese onslaught.

RCEP means not only a mega trade deal among partners but also a Free Trade Agreement with China, meaning giving them zero- duty access.

The next RCEP ministerial is expected to be held in Malaysia.