Chapter 2: Trade In The Modern World

International Trade

Atricle Link: http://articles.economictimes.indiatimes.com/2014-10-10/news/54867898_1_trade-facilitation-international-trade-global-trade

Article Title: India plans committee to ease customs norms for boosting international trade

Dilasha Seth, ET Bureau Oct 10, 2014, 03.29AM IST

 

 In this article, India, two months after it blocked an international agreement on easing trade regulations against the WTO, India has initiated measures to reform customs procedures and cut red tape to speed up international trade.

The government has decided to set up a national committee on trade facilitation, which will suggest and implement measures to ensure seamless movement of cargo by addressing constraints like high transaction costs and poor infrastructure.

India on July 31 Vetoed the trade facilitation agreement at the World Trade Organization. The World Trade Organization is the only global international organization dealing with the rules of trade between nations whose goal is to help producers of goods and services, exporters, and importers conduct their business. Since India vetoed the WTO, they'll start carrying out trade facilitation and customs reforms. It will cut transaction cost for exporters.

  The WTO trade facilitation pact, signed in December 2013, contains legally binding provisions to standardise customs rules in all 159 member-countries for faster and more efficient movement of cross-border cargo.

Since India vetoed the agreement, they're committed to there own Trade Facilitation. The trade facilitation goal requires harmony between departments like customs, shipping & ports, road transport & highways, and the Directorate General of Foreign Trade ( DGFT). It is important to get each of them on board, said the official quoted above.

"WTO deal or no deal, we are carrying out trade facilitation and customs reforms. It will cut transaction cost for exporters," said the official. "We are anyway working towards ratifying the WTO Trade Facilitation Agreement. We need to make legal amendments in two to three places. We are prepared," he added. During his US visit, Prime Minister Narendra Modi had told President Barack Obama that trade facilitation was important for India and it expected the US' support in addressing India's concerns over public stockholding for food security. Finance minister Arun Jaitley had made several announcements in the budget, allocating significant funds towards trade facilitation. It included extension of 24x7 customs clearance facilities to many more ports, airports and sea ports.

Was it smart for India to Veto the WTO TFA? Since India is committed to having there own Trade Facilitation, What are the pros and cons of this situation & do you think they will survive without the WTO?