Geneva/Nusa Dua, Indonesia: The first global trade reform since the creation of the World Trade Organisation is ready for agreement by ministers from the body’s 159 member countries.
WTO Director-General Roberto Azevedo has drafted a text that he will submit to the full membership, signalling that he believes he has found terms that are acceptable to all members, including India which had raised vocal objections over agriculture. Barring any last-minute veto, the deal aims to slash red tape at customs around the world, give improved terms of trade to the poorest countries, and allow developing countries to skirt the normal rules on farm subsidies if they are trying to feed the poor.
It would also revive confidence in the WTO’s ability to negotiate global trade deals, after a string of failures that left the body at risk of sliding into irrelevance. “We are very close,” WTO spokesman Keith Rockwell told reporters at the meeting on the Indonesian resort island of Bali. “As things stand now, the prospects are promising.”
Just a day earlier, a deal that would add hundreds of billions of dollars to the world economy by some estimates teetered on the brink of collapse. In an organisation based on consensus among all of its members, attention focused squarely on India as the main stumbling block to the WTO’s first global trade deal in two decades.
India has insisted it would not compromise on a policy of subsidising food for hundreds of millions of poor, putting it at odds with the US and other developed countries.
It is 12 years since the WTO launched the Doha Round, which failed to yield concrete results, and many experts had warned that failure in Bali would leave regional and bilateral trade arrangements as the only avenue for trade reform, dividing the world and reversing the globalising goal of the WTO.
A Bali trade deal, which is far less ambitious than the Doha Round had aimed for up until two years ago, would open the way to much wider trade reforms and enable the body to modernise its rules for the internet era.
The “all or nothing” agreement covers several areas, the largest of which is trade facilitation — a global standardisation and simplification of customs procedures that would tear down barriers to cross-border movement of goods.
The deal also includes limited reforms in agriculture, including reducing export subsidies, opening borders to least developed countries, and the food subsidy policy championed by India, which proved the biggest obstacle.
India, whose government faces the risk of losing elections next year, has said its tough stance drew support from developing countries in Asia, Africa and South America, though the meeting’s host, Indonesia, pressed for it to soften its stand.
India will next year fully implement a welfare programme to provide cheap food to 800 million people that it fears will contravene WTO rules curbing farm subsidies to 10 per cent of production. A proposal led by the United States offered to waive the 10 per cent rule until 2017. But India has rejected it, demanding the exemptions continue indefinitely until a solution is found.