WTO BALI PACKAGE: AN ANALYTICAL REVIEW
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An Unequal Package (Free
Available)
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Uncertain Future for DDA (Free
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The Bali Package is a trade agreement resulting from the
Ninth Ministerial Conference of the World Trade Organization in Bali, Indonesia
on 3–7 December 2013. It is aimed at lowering global trade barriers and is the
first agreement reached through the WTO that is approved by all its members. The
package forms part of the Doha Development Round, which started in 2001.
In just 84 days after assuming office Roberto Carvalho de
Azevêdo, the new director general of the World Trade Organisation (WTO) managed
to produce a successful outcome to a ministerial meeting, something that had
eluded his predecessor for eight years. The WTO’s ninth ministerial meeting
during 3-7 December 2013 in Bali, Indonesia, was a “personal triumph” for
Azevêdo, who took office only three months before the ministerial. Given the
pronounced descent of the organization towards irrelevance since 2005 under the
leadership of the previous director general Pascal Lamy, the “Azevêdo effect”
has dispelled the cycle of negative perceptions that the WTO cannot deliver. The
Bali outcome has brought WTO back into the negotiating orbit. It has suddenly
raised the prospect of a revival of the comatose 12-year-old Doha Round of Trade
Negotiations or the Doha Development Agenda (DDA) as it is otherwise called.
An Unequal Package
The industrialised countries along with a group of advanced
developing countries, including China, left no stone unturned in harvesting, at
Bali, a WTO agreement on trade facilitation (TF), an agreement that is meant to
simplify customs procedures and ease the ûow of goods across borders. Although
TF forms part of the Doha body, the manner in which it was plucked out from the
DDA single undertaking constitutes an important
victory for the United States (US) and the European Union (EU).
Without having to deliver on agriculture, which was to be the
engine of the Doha trade negotiations, or the “developmental” beneûts promised
to the least developed countries (LDCs), the trade elephants succeeded in
pushing through a grand but grossly unequal Bali package. Without making any
“payment” in the other two pillars – agriculture and development – of the Bali
package, the industrialised countries have walked away with a prize that can
allow them to close their eyes to the need to rescue the larger 12-yearold
DDA.The proclaimed goal of the ûrst “multilateral TF agreement” since the
creation of the WTO in 1995 is “to simplify customs procedures by reducing costs
and improving their speed and efficiency”.
In reality, the new agreement streamlines market access in
developing countries and LDCs, and further expands the WTO’s remit into domestic
policy governance. Azevêdo, when he was the trade envoy representing Brazil at
the WTO, had argued that TF was nothing but market access for industrialised
countries. It is another matter that as the WTO chief he campaigned on a war
footing for a binding agreement. The constant mantra that Azevêdo and think
tanks in Washington have chanted endlessly is that the TF agreement will
generate an additional $1 trillion to the global economy.
The future direction of the multilateral trade negotiations
will only become clear in the next year. The “post-Bali work” programme – on
which there was little discussion either in the run-up to the meeting or at the
ministerial – contains ûve paragraphs in the Bali Ministerial Declaration. On
the DDA, the declaration says, We instruct the Trade Negotiations Committee to
prepare within the next 12 months a clearly deûned work programme on the
remaining Doha Development Agenda. This will build on the decisions taken at
this Mini sterial Conference, particularly on agriculture, development and LDC
issues, as wellas other issues under the Doha mandate that are central to
concluding the Round. Issues in the Bali Package where legally binding outcomes
could not be achieved will be prioritised. Work on issues in the package that
have not been fully addressed at this Conference will resume in the relevant
Committees or Negotiating groups of the WTO.
The Bali declaration candidly admitted that there are no
legally binding outcomes in the agriculture and development pillars of the
package. There are four issues – general services, public stockholding for food
security purposes, understanding of tariff rate quota administration and export
competition – in the agriculture pillar. And then, there is the issue of
trade-distorting subsidies for cotton (provided mainly by the US) that has been
hurting some of the poorest countries in Africa and has not been addressed since
the Hong Kong Ministerial Meeting of 2005 which called for an “ambitious,
expeditious, and specific” outcome to help the cotton farmers in Benin, Chad,
Mali and Burkina Faso. In the development and LDC areas, four issues have been
pending since 2005. They include preferential rules of origin for the poorest
countries, operationalisation of waiver concerning preferential treatment to
services and services suppliers in LDCs, dutyfree and quota-free market access
for these countries, and a monitoring mechanism on special and differential
treatment flexibilities. None of
these issues were comprehensively addressed in Bali and nothing was treated on
par with TF.
