Global trade gets boost from US-India deal

The United States and India have reached a deal to streamline customs rules that could set up a global framework to move goods more efficiently across borders. 

U.S. Trade Representative Michael Froman said Thursday that the two nations have hammered out the Trade Facilitation Agreement (TFA) following months of high-level meetings with Indian officials.

{mosads}”We have overcome that delay and now have agreement with India to move forward with full implementation,” Froman said. 

The deal between the U.S. and India could give new momentum to efforts to reach a broader deal at the World Trade Organization.

India had led a small group of countries that objected to the WTO agreement, which was worked out at a WTO ministerial conference in Bali nearly a year ago. India and the other countries had worried the deal could lead to food shortages in their countries. 

To that end, the talks also produced an understanding on food security, which will keep some WTO dispute settlement procedures in place until a permanent solution has been adopted. 

The U.S. business community praised the deal.

Linda Dempsey, vice president of international economic affairs with the National Association of Manufacturers, called it “welcome news” and said the deal was “an unparalleled opportunity to boost global growth and commerce.”

Supporters say it could create 21 million jobs — the bulk of them in nations with developing economies — and produce $1 trillion in global economic activity.

President Obama and India’s Prime Minister Narendra Modi discussed the deal during Modi’s September trip to Washington.

Modi had argued that there needed to be considerations around food security issues, and those needed to move in parallel with the trade pact. 

The agreement is also intended to show that the WTO itself can still function and perhaps give a boost to the long-delayed Doha talks launched in 2001.

Following the July collapse of the deal, the first multilateral trade agreement in the WTO’s history, Director-General Roberto Azevêdo had questioned the trade body’s effectiveness and suggested a review of how it operates.

Froman said that the agreement reaffirms the United States’ and India’s “joint commitment to the success and credibility of the WTO.”