Bali Update: What has happened since the WTO Ministerial?

WTO LogoAfter having pulled the members together to achieve consensus to make some decisions at the WTO Bali Ministerial in December, 2013, months later WTO Director-General Azevêdo issued a warning against revisiting those decisions.

The “Bali Package” adopted at the Ministerial consists of a number of small deals pulled from the broader Doha Agenda for negotiating a new set of rules to govern international trade:

  1. Decision on duty-free, quota-free (DFQF) access for products of least-developed countries.
  2. Decision to simplify preferential rules of origin for least-developed countries to make it easier for them to qualify for DFQF entry into the importing countries.
  3. Decision operationalizing the “services waiver” that will grant least-developed countries preferential access to other countries’ services markets.
  4. Decision on a “monitoring mechanism” to analyze and review implementation of special and differential treatment rules for developing countries.

The Agreement on Trade Facilitation, in particular, is seen as the most important component of the Bali Package. It Importsintroduces requirements for members to improve the efficiency, effectiveness, and transparency of their customs procedures. The anticipated benefits are a 10%-15% reduction in the costs of international trade. For developed countries, these changes hold the promise of increasing trade flows and revenue collections. Furthermore, the Agreement contains promises of technical assistance and capacity building for developed countries to help them to make the required investments associated with implementing the Agreement.

At this point, the text adopted in Bali remains a draft. Though its substance is not expected to change substantially, its text will become final only when it is adopted by the WTO General Council. This adoption is currently scheduled to occur at the meeting of July 31, 2014.

Meanwhile, however, India has raised the concerns of food security and indicated that it wants to see more progress on this issue. At Bali, the members agreed to continue discussions to arrive at a permanent solution on how to treat agricultural subsidies. Meanwhile, they instituted a “peace clause” of four years during which such programs by developing countries that meet certain criteria are to be shielded from trade challenges, even if they negatively impact other countries’ trade. This issue is of prime importance to India who wants to see progress on this issue. India wants this “peace clause” to be made permanent and believes that, like the Trade Facilitation Agreement, this should become part of the Bali Package.

Such a proposal is likely dead-on-arrival, however. Developed countries such as the United States, have agricultural subsidies programs that they would dearly love to be able to protect from complaints by other WTO members. They consider India’s economy to be too big to be eligible for this type of protection.

We can expect the long-running “negotiations” over the difficult issue of agricultural subsidies to continue for some time. (To be continued -)

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One thought on “Bali Update: What has happened since the WTO Ministerial?

  1. Pingback: Bali Update: What has happened since the WTO Ministerial?, Part II « IntLawGrrls

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