WTO clinches ‘historic’ deal to smooth trade

The World Trade Organisation’s 159 member countries yesterday agreed to a global trade deal for the first time in the group’s 18-year history, a move that would bring duty-free access for the country’s exports to all developed and developing nations.
Coined the ‘Bali package’, the deal hinges on three pillars — trade facilitation, food security and least-developed countries’ package — and is touted to add $1 trillion to the global economy.
Particularly of benefit to Bangladesh is the LDC package, which, other than providing duty-free and quota-free access for products from the world’s poorest nations, will simplify preferential rules of origin for LDCs. The watered-down rules will make it easier for the 49 countries to identify products as their own and qualify for preferential treatment in importing countries.
The LDC package also allows LDCs preferential access to richer countries’ services markets, and improved market access for cotton products from LDCs and development assistance for production in those countries.
But the keystone of the landmark agreement is trade facilitation, meaning measures will be taken to cut red tape and streamline   customs and port procedures to ease the movement of goods through national frontiers.
The International Chamber of Commerce estimates the feature will lower the cost of doing business by as much as 10-15 percent and add $1 trillion to global output.
“For first time in our history, the WTO has truly delivered. This time the entire membership came together. We have put the ‘world’ back in World Trade Organisation,” said a tearful Roberto Azevêdo, WTO’s director-general, after a consensus was reached following gruelling negotiations that went past the conference’s scheduled time.
Originally slated to end on Friday, the ninth WTO Ministerial Conference in the Indonesian resort island of Bali dragged on to yesterday after a group of Latin American nations led by Cuba in the eleventh hour blocked a consensus in an effort to have the WTO call for the lifting of the 53-year old US trade embargo on the Caribbean island.
As a result, the members had to reconvene early yesterday morning, and Azevêdo, working with Indonesian Trade Minister Gita Wirjawan, managed to resolve the issue just before noon.
“This is a landmark,” Indian Trade Minister Anand Sharma told the Financial Times, whose earlier hard stance over the food security issue threatened to derail the deal.
India wanted a pact that would satisfy its demands to exempt food security plans from being counted under subsidy spending caps, while the US was concerned that surplus from India’s food programme may get dumped onto world markets.
But on Friday night a compromise was reached. The agreement now lets India and other developing nations continue to subsidise their crops to bolster food security without having to worry about legal challenges, so long as the practice does not distort trade. This waiver will last for four  years and if necessary can be continued even further.
“I view this as a victory for the farmers of India, for the subsistence farmers, for the poor farmers of all developing nations,” Sharma told reporters afterwards.
The benefits of the Bali package are likely to take years to materialise, with Azevêdo set to prepare a roadmap for it over the next 12 months.
The agreement in Bali means that the WTO’s role as a forum for negotiating trade liberalisation agreements somewhat repaired. In recent years, the Geneva-based body was made to feel irrelevant, with an increasing trend towards bilateral trade agreements or alternative regional pacts.
“It looks as if tonight we have saved the WTO. That would be a historic event,” said Karel De Gucht, the European Union’s trade commissioner.
The ministerial meet, chaired by Wirjawan, also formally accepted Yemen as the group’s 160th member. Yemen’s parliament now has six months to ratify its accession package, the WTO said.
The WTO was formed in January 1995 after the Uruguay Round trade negotiations spanning 1986-1994 were completed. Apart from being a forum for world trade talks, the organisation arbitrates trade disputes between member countries.