U.S. and India Agreement over Food Security in WTO

Earlier this week, the United States and India were able to reach a breakthrough in negotiations regarding food security issues, which international trade analysts have speculated could lead to an international trade deal worth $1 trillion USD for the global economy. Debates regarding India's food security programs, which the country views as vital for ensuring meals for its poorest citizens, had continued for months since proposals of the Trade Facilitation Agreement (TFA) were first made at a World Trade Organization summit in Bali, Indonesia. With the breakthrough achieved, global markets analysts speculate that the achievement not only greatly benefits the policy goals of India and the U.S., but also the WTO and international system as a whole.

The party that benefited the most directly from the agreement is clearly India, which was able to obtain a peace clause to protect its food subsidies from legal challenge. While the agreement between the U.S. and India regarding this was specified to remain in place "until a permanent solution regarding this issue has been agreed and adopted," India successfully held its ground on an issue viewed as a necessary measure to ensure poor farmers and consumers survive in the business community. The agreement constituted a major political victory for Indian PM Narendra Modi, who sustained heavy amounts of international criticism over his refusal to accept the conditions of a greatly anticipated multilateral trade agreement.

With India's acceptance of the U.S.' proposal, the TFA now essentially has the green light to move towards adoption by the other member states of the WTO, which is widely considered as a victory for the international community. The TFA comprises a variety of measure intended to help lower transaction costs significantly and provide for increased efficiency in market access. The agreement also benefits exporters, especially engineering exporters who have large consignments and currently face barriers to entry at several international ports and customs. 

The WTO as an organization has also gained substantial international credibility following the breakthrough settlement. India's ability to derail the entire negotiation process regarding the TFA lead to a rise in doubts regarding the organization's ability to negotiate successful multilateral trade agreements. Following the breakthrough, however, the U.S. and India, two of the WTO's most influential economies, have breathed life into the organization as their agreement should pave the way for the adoption of the TFA.