Indo-US deal could lead to global trade deal within 2 weeks: WTO

The World Trade Organization’s top official said there’s a high chance the global body would soon implement its biggest-ever deal after the US and India broke an impasse on food stock holdings. The 19-year-old organisation will “use this momentum that this breakthrough has created to restore confidence in the WTO and multilateral trading system,” directorgeneral Roberto Azevedo said in a briefing in Brisbane on Friday. He said he’ll consult with all WTO members to “collectively and finally resolve the impasse as quickly as possible.”

The two countries agreed that India will extend the world’s biggest food subsidy programme until a permanent solution is reached, according to a US statement on Thursday. India in July blocked part of the WTO deal because it was unclear if the programme could continue beyond a 2017 deadline.

The WTO estimates the deal will stimulate the global economy by $1 trillion by removing delays at border crossings. The US-India agreement was reached before the country’s leaders are expected to meet at the Group of 20 meetings in Australia that starts Saturday.

“Implementation of the Trade Facilitation Agreement of the WTO will help a great deal,” Anupam Shah, chairman of India’s Engineering Export Promotion Council, said in an email. “The TFA will bring in uniform standards at Customs and port clearance and help us achieve fast turnaround time.”

The India-US agreement will reduce the cost of trade by about 10% for developed countries and 14% for developing countries, according to US Trade Representative Michael Froman.

“Now, we are looking forward to take the next steps on the implementation of all the elements of the Bali package, notably the immediate adoption of the Trade Facilitation Protocol due by July 31,” the European Union’s Trade Commissioner Cecilia Malmstroem said in a statement.

Meanwhile, as world leaders descend in Brisbane for the G-20 Summit starting Saturday, Russia has stationed warships in waters off Australia’s north-eastern coast, prompting the Australian prime minister to angrily accuse Russia of trying to reclaim the “lost glories” of the Soviet Union. The diplomatic drama, which has been simmering since a Malaysia Airlines plane was shot down over an area of Ukraine controlled by Russian-backed separatists in July, has threatened to overshadow Australian Prime Minister Tony Abbott’s goal of keeping this weekend’s G-20 summit focused on economic growth.

In recent days, four Russian warships entered international waters to coincide with Russian President Vladimir Putin’s visit. Australia, in turn, sent three warships of its own to monitor them. The Russian embassy said on Friday that Russia’s Pacific fleet was testing its range, and could be used as security for Putin. Abbott was not amused.