Pro Trade in Asia: This story is part of “Pro Trade in Asia,” POLITICO Pro’s on-the-ground series covering the WTO ministerial meeting and the TPP negotiations.
The World Trade Organization on Saturday reached a deal on global customs issues that officials say could boost global economic output by as much as $1 trillion, but only after a marathon negotiating session that went down to the wire.
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After resolving a deadlock over India’s food security plans that threatened to derail the pact, negotiators then confronted a block by Cuba and some of its allies in Latin America who said they objected to the pact because it does not ease the long-time U.S. economic embargo on the Communist-run island. Cuba and the other countries dropped their resistance after meeting with U.S. Trade Representative Michael Froman, according to diplomatic sources.
Discussions ran well up to the last minute, as many trade officials were preparing to board planes for the next round of Trans-Pacific Partnership talks, in Singapore.
“Ladies and gentlemen, I’m proud to say for the first time in our history the WTO has truly delivered,” WTO Director General Roberto Azevedo said during the closing session of the Bali ministerial meeting. “This package is not an end. It’s a beginning. As a consequence of our progress here, we’ll now be able to move forward on the other areas of our work that have been stalled for so long.”
“With the Bali Package, you have reaffirmed not just your commitment to the WTO but also to the delivery of the Doha Development Agenda. The decisions we have taken here are important stepping stones towards the completion of the Doha Round, and it is very welcome that you have instructed us within the next 12 months a clearly defined work program to this end.”
Shortly after Azevedo’s comments, other trade leaders began to make their own celebratory sounds.
“We finally have a deal,” EU Trade Commissioner Karel De Gucht said in a tweet.
“We have negotiated a package that will bring food security to billions of the world’s poorest,” Indonesian Trade Minister Gita Wirjawan said Saturday. “We have delivered an agreement on trade facilitation that will inject up to $1 trillion into the world economy. We have agreed a groundbreaking suite of initiatives to help least-developed countries benefit more from the multilateral trading system.
“We have agreed there is a need to change the World Trade Organization’s agreement on agriculture, which will take time. In the interim period, the decision we have taken here in Bali will allow developing countries to avoid disputes over their legitimate food security programs.”
“We have crossed the finish line here in Bali, but the race is not over. Now we must complete the Doha round,” Gita said.
The WTO deal is, as Azevedo described, the first membership-wide agreement in the 18-year history of the organization and a victory for new director general, who took office on September 1 and worked feverishly to craft an agreement leading up to the group’s ministerial conference this week in Bali.
Azevedo prodded members in the past week and months to come together the WTO put itself back in the game of negotiating trade agreements at a time when the interests of big players like the United States and the European Union have shifted to regional free trade agreements.
Azevedo and many others this week warned a failure could mean the death of trade negotiations in WTO, which is the only avenue that most poor countries have for trade talks
“What’s at stake is the ability for this institution to support growth and development – the contribution we make to the lives of people on the streets around the world. What’s at stake is the cause of multilateralism itself,” Azevedo said on Tuesday in a speech to members.
The biggest element of the “Bali package” is a trade facilitation agreement that would make it easier and cheaper to move goods around the world by cutting red tape and improving customs procedures. Besides boosting trade, the pact could reduce corruption by eliminating opportunities for customs officials to extract bribes to get goods across border.
The Washington-based Peterson Institute for International Economic has estimated an ambitious trade facilitation pact could boost global economic output $1 trillion and create more than 21 million jobs, most of those in the developing world. The binding agreement requires countries to implement reforms in a number of areas, but allows them to decide how quickly to do that and promises technical assistance from rich countries for the more challenging commitments.
To get the agreement, Azevedo had to resolve the concerns of the United States and other countries over an Indian-led proposal asking for a change in WTO rules that would allow developing countries to increase trade-distorting farm subsidies to boost domestic food stocks.
The deal also includes agriculture provisions encouraging the elimination of export subsidies and better administration of tariff-rate quotas. The new quota rules are intended to encourage more imports under the quotas, but the United States is expected to opt out because they would not apply to large developing countries such as China.
The development provisions include measures to help African countries increase cotton production, to encourage developed countries to eliminate quotas and duties on imports from least-developed countries and to lower barriers to services companies from least-developed countries.
WTO closes 1T trade deal in Bali
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