Is WTO Dying ?

(Logo from www.wto.org )
Recent veto from India on Trade Facilitation Agreement ( TFA ), has created a debate over future of World Trade Organization (WTO).  General Agreement on Tariffs and Trade(GATT ), the parent of WTO was formed in 1948 and WTO was instituted amalgamating 26 pre-existing agreements in 1995. No new agreement has been signed by any members of WTO in these 19 years of establishment. Therefore, this deal on TFA is really crucial  for sustainability of WTO. In this scenario, Indian denial to TFA was a blow to death of WTO- many countries and analyst presuming-.

What was Indian reservation? Major concern for this denial was issue of subsidy on agriculture and food security. The WTO rule says the total value  of food subsidy limit is 10 percent of total production, considering 1986 as base year. Besides, the base price of product is at 1986-88 level whereas subsidy price is at current rate. According to Times of India , subsidy to rice is at 9 % in India and slightly lower in case of wheat. These are expected to grow in future by crossing it's ceiling of 10 % imposed by WTO, as Food Security Act is  in hand and more Minimum Support Price policy is being practiced. India is opposing saying that rule with which food subsidy limit was imposed is outdated. Developing nation has huge amount of Below Poverty Line (BPL) population, so more subsidy has to given in food for their protection. If such subsidy is not given, food security of people is badly affected.

This TFA has to be signed and initiated by 2015 by India. As India has failed to sign on 31 July, 2014 deadline, Inidan official are saying that if concerns are addressed, this can be sign in September,  according to Reuters. India and other developing nations like South Africa had raised the issue of food security/subsidy in the ministerial conference at Bali in 2013. There was consensus that by 2017 the issue of food subsidy will be solved and India will sign on TFA by July 31, 2014. However, currently India wants both the TFA and subsidy agreement has to go parallel.

We have to wait till December,2014 for the result of this. However, the issue depicts the importance of  food policy and WTO's role , especially to developing  and least developed nation. This has to be taken seriously and a win win decision is needed. As a result of which, WTO will sustain and can maintain it's provisions in one hand and in another hand issue of food security of developing and least developed country will be addressed.