The Government has committed to supporting the World Trade Organisation (WTO) to bring to an end the ongoing global stalemate in the implementation of the Trade Facilitation Agreement that was due for adoption in July.

The pledge follows a courtesy call by the organisation’s director-general, Roberto Carvalho de Azevedo, on President Paul Kagame and the Minister of Trade and Industry, Francois Kanimba, in Kigali yesterday.

Azevedo is currently on a mission to inform global leaders about the repercussions on the governance on global trade if the current standoff persists and to exchange views on possible solutions.

Endorsed in 2013, the agreement aims at improving efficiency of customs procedures, customs compliance, technical assistance and capacity building initiatives for developing countries.

If adopted as a trade protocol, it would eliminate bottlenecks to international trade between various countries by streamlining customs and is believed could add $1 trillion to global Gross Domestic Product as well as generate 21 million jobs globally.

Background

The stalemate arose when India moved to renegotiate part of the agreement that they claimed would alter their food security policy.

Kanimba said government had for long gained in numerous ways from the cooperation with the trade agency and would be ready to support in any way possible to end the ongoing stalemate that has hindered the adoption of the trade facilitation agreement.

"Among the ways we have benefited is capacity building opportunities provided by WTO,” the minister said.

Kanimba noted that Rwanda was comfortable with the implementation of the Trade Facilitation Agreement and even prior to the agreement draft a number of reforms had been implemented and measures put in place.

"We are already compliant with 56 per cent of the trade facilitation agreement content, the remaining gaps do not require a lot of efforts to totally comply with the agreement,” Kanimba said.

The minister, however, noted that Rwanda was facing a few challenges while trying to comply with some of WTO’s commitments as the country is part of the East African Community which also has binding common external tariffs.

"Rwanda is part of the EAC which is a free trade area with a common external tariff which was negotiated before Rwanda and Burundi joined the bloc in 2009,” Kanimba said.

"On the other hand, we are bound to implement the binding tariff we committed to WTO years back. Currently, we are not compliant with all WTO commitments. We need to find a solution.”

Azevedo welcomed Rwanda’s commitment saying that the country had for long been a committed partner to WTO and had played a critical role in previous negotiations.

"The President assured us that the cooperation would continue to deepen, we could not ask for more. We cannot waste the agreement, we have to find out ways of implementing it. There are many benefits for countries like Rwanda in terms of technical assistance and capacity building to upgrade customs procedures,” Azevedo said after meeting the President at Urugwiro Village.

Regarding the challenge Rwanda faces in complying with the commitments, Azevedo said the technical difficulties were not new especially that they were coming after commitments had been made.

He pledged that, together with other member countries, they will find out ways to harmonise with other members the practices of the region and WTO.

"It is only a mismatch between the bound commitments, it is not a new phenomenon, and there are technical options that could be discussed with the secretariat for a way forward,” the WTO chief said.

He pledged continued assistance in areas of technical assistance and capacity building.

The stalemate

Currently, India procures the food produced (mostly wheat and rice) in the country at a fixed price that is higher than the market price and stock pile it.

Part of the produce is sold to the poor segment of their population at subsidised prices.

When there is surplus produce, it is sold to the international market. But there have been complaints from some developed and developing nations that the programme stalls trade and negatively affects the food prices and food security in their region.

India’s food security programme is seen as a trade-distorting subsidy and is amplified by the fact that the administered prices need to be compared to the average prices as the agreement states.