WTO Bali Deal – What Does it Actually Mean for Developing Countries?

In his pre-Ministerial call to action, WTO Director-General Roberto Azevedo said, “Not a single human being living in poverty anywhere in the world will be better off if we fail in Bali.” In the early hours of December 6th Azevedo announced that the WTO had successfully concluded its first comprehensive agreement since its foundation in 1995. Did it deliver for the developing countries that the Doha Round is intended for?

The only legally binding deal signed at Bali is the headline Trade Facilitation agreement – the benefits of which, for both developed and developing countries, are indisputable. The deal will simplify customs procedures by reducing costs and improving their speed and efficiency, thereby making trade easier, faster and cheaper. All WTO members stand to gain from this, but developing countries, where red tape tends to be at its thickest, will see a disproportionately high percentage of the benefits. Landlocked countries in particular stand to gain, where goods must travel across multiple borders, and SMEs will also be able to increase their exports and developing countries will become more attractive to investors. The implementation phase of the deal will take time, but every piece of red tape to be cut is a step in the right direction to creating a “lifeline” for the world’s poorest people as well as creating a boost of up to $1 trillion to the world economy.

Against the undeniable success in securing such a deal, the other aspects of “Doha Lite” don’t amount to much. Developed countries will:

–  “Seek to improve” the number of LDC products that receive duty-free, quota-free access

–  “Agree on the importance of pursuing progress” in lowering US cotton subsidies

–  “Endeavour” to relax restrictive rules of origin

Given that Doha was labelled a ‘Development’ Round of trade talks, the actual commitments made in the LDC part of the package are extremely weak. As developed countries had already promised to provide DFQF access to 97% of LDC exports at the the Hong Kong Ministerial in 2005, this is merely a reiteration, and a missed opportunity to create a concrete timetable to implement this 8 year old promise – “seeking to improve” the current level of 80% coverage hardly puts the pressure on.

Cotton, always an area of serious contention, but another subject on which developed countries had made promises in 2005, was even more disappointing. The statement “we regret that we are yet to deliver” is hardly comforting to the thousands of West African farmers who continue to suffer due to the US and others’ determination to subsidise a few large producers.

Despite these disappointments, the fact that anything at all was signed in Bali should be seen as positive. The approach of tackling a issues in bit-sized chunks should make the rest of the Doha agenda begin to seem more manageable, and the WTO has proved that it can get things done. The WTO has rescued itself from the edge of the abyss, remaining the only international economic forum in which developing countries are on an equal footing with their developed counterparts.

The next WTO Ministerial will take place in 2015, the watershed year for development that will see the successor agenda to the Millennium Development Goals come into play. The post-Bali agenda must be put at the heart of the post-2015 agenda to create the political will necessary to continue the impetus that Bali has provided to create a free and fair trading system that allows developing countries to trade their way out of poverty.

 

Summary

In his pre-Ministerial call to action, WTO Director-General Roberto Azevedo said, “Not a single human being living in poverty anywhere in the world will be better off if we fail in Bali.” In the early hours of December 6th Azevedo announced that the WTO had successfully concluded its first comprehensive agreement since its foundation in 1995. Did it deliver for the developing countries that the Doha Round is intended for?

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By | 2017-10-08T11:56:22+00:00 December 13th, 2013|Uncategorized|Comments Off on WTO Bali Deal – What Does it Actually Mean for Developing Countries?

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