Washington, Nov 30 (IANS): The International Monetary Fund (IMF) has welcomed the World Trade Organization (WTO) agreement on public stock holding for food security, paving the way for signing the trade facilitation agreement for easing global custom rules.

"I strongly welcome the decisions adopted by the general council of the WTO Nov 27, related to public stock holding for food security purposes, the trade facilitation agreement (TFA) and the post-Bali work," IMF managing director Christine Lagarde said in a statement.

"These decisions reaffirm the commitment of the international community to an open trade system. They also provide an important opportunity for advancing multilateral trade negotiations in other areas, which is essential to bolster global growth, create jobs and reduce poverty," she added.

The TFA approved by 160 WTO members in Geneva Thursday aims to streamline and harmonise customs procedures to bring an estimated saving of over $1 trillion annually.

An agreement between India and the US earlier in the month opened the way for a consensus on the TFA which eluded the WTO members in July.

"The TFA is a big deal which will be effective in reducing the cost of doing business for developed countries by 10 percent and for developing countries by 14 percent, adding billions of dollars to the world economy," said Michael Froman, United States trade representative in a Federation of Indian Chambers of Commerce and Industry (Ficci) meeting here last week.

India has asked for a permanent solution to the issue of public stockholding for food security purposes and not restricted for a period of four years as decided earlier during the WTO ministerial meeting in Bali, Indonesia, last year.

India has been under pressure from several countries, particularly the US, to drop its objections to the TFA.

India's objections are on the WTO limits on agriculture subsidies at 10 percent of the total value of foodgrains production, and on stockpiling them. Complying with the Food Security Act passed in 2013 that guarantees subsidised foodgrains to around 70 percent of the population could result in breaching these limits leading to penalties for India.

Ministers also agreed on what is called the "peace clause", that till 2017 no country can move to the dispute settlement body of the WTO against another member if its government was found to be breaching the level of subsidy freeze that was permitted.

The TFA, the first multilateral treaty in the WTO's history, would now need to be ratified by governments of individual member countries, including India, for coming into effect, which is expected to happen next year.