Bali, 06/12/2013 (Agence Europe) - This partial agreement on the Doha Round, the first multilateral deal since 1994, could generate a trillion dollars a year in global GDP growth.
As we were going to press on Friday 6 December on the fourth and last day of a WTO ministerial conference in Bali, member states were about to approve by consensus a draft ministerial statement validating an agreement on the Bali package. A compromise was found in the night of Thursday and Friday between India and the agricultural export countries, headed by the United States, which enabled progress to be made in the Bali package talks. At 8.00pm on Friday, WTO Director General Roberto Azevedo handed delegations the draft statement for examination. A meeting of delegation heads was scheduled for midnight to validate the consensus and the closing ceremony was due to follow. Azevedo still has to deal with the concerns of Cuba and possibly Pakistan.
The key point of this partial agreement on the Doha Round, which is completed by a work programme to implement from 2014, is an agreement on the facilitation of trade, comprising a batch of binding rules to simplify and ease customs procedures to facilitate trade flows. The deal could reduce costs by some 10% and generate an estimated US$ 400 billion a year.
The trade facilitation deal includes a development package with preferential rules of origin for LDCs, operationalisation of the waiver concerning preferential treatment to services and service suppliers of LDCs, duty-free quota-free market access for LDCs, and the monitoring mechanism on special and differentiated treatment
It also includes a decision on cotton, and an agricultural chapter - a decision on public stockholding for food security purpose, a decision on a memorandum of understanding on tariff rate quota administration provisions of agricultural products, a decision on export competition and a decision on general services.
The Doha talks began in 2001 with a much more ambitious trade liberalisation programme covering farming, industrial products, services, trade facilitation and a number of rules. After member states failed to sign a deal in 2008 on farm and industrial products, the round remained in deadlock and needed a breath of fresh air, which Brazilian Roberto Azevedo, who took up the job in the summer of 2013, seems to have achieved.
The question of food security will be discussed this week at the WTO biannual conference, with a request from India, connected with the Bali package, via a G33 proposal to allow developing countries to stockpile staples to ensure food security, despite the 10% limits on production laid down by the WTO for domestic agricultural aid. Ahead of general elections next year, the Indian government wanted to ensure its basic food aid programme would continue that subsidises the price of staples for 70% of the country's most deprived without the risk of complaints being lodged at the WTO. The Indian request was greeted by hostility from agricultural export countries and neighbouring countries like Pakistan, which fear that the stockpiles for the domestic market would later be exported at prices that the competition cannot match.
During preparatory talks in Geneva on the Bali package, the WTO member states agreed on a compromise suggested by the United States, which was at first firmly opposed to the Indian idea. The compromise is based on a peace clause for a period of four years, which would allow stockpiling countries immunity from being taken to court at the WTO, thus allowing immunity from trade sanctions, while awaiting a longer-term solution. But India rejected the idea of a peace clause for just four years, saying that this was not long enough for the WTO rules on agriculture to be changed. Charismatic Indian Trade Minister Anand Sharma wanted an indefinite peace clause.
At one point, India's refusal to budge risked jeopardising agreement, but India and the United States have settled their differences on the peace clause, thus paving the way for the first multilateral agreement since the creation of the WTO in 1995. The magic formula set out in the draft statement expected to be adopted notes the following: “Members agree to put in place an interim mechanism as set out below, and to negotiate an agreement for a permanent solution for the issue of public stockholding for food security purposes for adoption by the 11th ministerial conference”. “In the interim, until a permanent solution is found, and provided that the conditions set out below are met, members shall refrain from challenging through the WTO Dispute Settlement Mechanism.” In other words, if a permanent solution is not found over the next four years, the mechanism will automatically be renewed for a further four years, giving India a way of ensuring the continuation of its food programme. (EH/transl.fl)