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WTO reaches first global trade reform deal in Bali

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Monday, 09 December 2013

WTO reaches first global trade reform deal in Bali

The Bali Ministerial Conference of the (World Trade Organization) concluded a day later than scheduled on 7 December 2013 with agreement on a package of issues designed to streamline trade, allow developing countries more options for providing food security, boost least developed countries’ trade and help development more generally. In addition to the Bali Package, ministers formally adopted a number of more routine decisions at the end of a five-day meeting opened by Indonesia’s President Susilo Bambang Yudhoyono, which also saw Yemen accepted as a new member.
“We did it!” said Indonesia’s Trade Minister Gita Wirjawan, who chaired the conference. “For the first time in our history: the WTO has truly delivered,” said WTO Director-General Roberto Azevêdo.
The talks, which began on 3 December, nearly derailed when Cuba refused to accept a deal that would not help open the United States embargo of the Caribbean island. That forced negotiations into Saturday morning. Cuba later agreed on a compromise with the United States. But there was skepticism on how much the deal had achieved.
The talks began under a cloud because of India’s insistence that it would back an agreement only if there was a compromise on food subsidies because of its huge program for stockpiling food to feed its poor. An eventual compromise was welcomed by India’s trade minister, Anand Sharma. While India had insisted on a permanent exemption from the W.T.O. rules, the final text aimed to recommend a permanent solution within four years.
The agreement is a milestone for the 159 members of the W.T.O., which was created in 1995. It rescues the W.T.O. from the brink of failure and will rekindle confidence in its ability to lower barriers to trade worldwide after 12 years of fruitless negotiations.
The deal would speed the passage of goods through customs. Analysts estimate that it could eventually bolster the world economy by billions of dollars and create more than 20 million jobs, mostly in developing countries. It still requires the approval of each member government.
Agreement on the agriculture part of the Bali Package required sorting out two issues. Much of the focus was on shielding public stockholding programmes for food security in developing countries, so that they would not be challenged legally even if a country’s agreed limits for trade-distorting domestic support were breached.
The proposed solution will be interim, and much of the discussion was about what would happen at the end of the interim period. The outcome of consultations was for the interim solution to exist until a permanent one is agreed, with a work programme set up aiming to produce a permanent solution in four years.
The other issue was about “tariff quota administration“, how a specific type of import quota (a “tariff quota” where volumes inside the quota have a lower duty) is to be handled when the quota is persistently under-filled. Members have agreed on a combination of consultation and providing information when quotas are under-filled.
Meanwhile, several documents remained unchanged from the versions negotiated in Geneva:

  • Duty-free, quota-free access for least developed countries to export to richer countries’ markets. Many countries have already implemented this, and the decision says countries that have not done so for at least 97% of products “shall seek to” improve the number of products covered.
  • Simplified preferential rules of origin for least developed countries, making it easier for these countries to identify products as their own goods, and qualify for preferential treatment in importing countries.
  • A “services waiver”, allowing least developed countries preferential access to richer countries’ services markets.
  • A “monitoring mechanism” consisting of meetings and other methods for monitoring special treatment given to developing countries.
  • Improving market access for cotton products from least developed countries, and development assistance for production in those countries.

Source: New York Times, Reuters, EurActiv, WTO