Photo credit: WTO | ANTARA - Photo: 2013

Trade: Some Unfinished Work Remains After Bali

By Kanaga Raja* | IDN-InDepth NewsAnalysis

GENEVA, (IDN | SUNS) – The ninth session of the Ministerial Conference of the World Trade Organization (WTO) came to a close on the morning of December 7, after adopting a Ministerial Declaration, the entire Bali package of ten texts, and five other Ministerial decisions.

The conference, which began on December 3 and was scheduled to end on December 6, spilled over into Saturday , when a very small group of countries, citing some concerns, had refused to join the consensus on the draft Bali package at an earlier informal Heads of Delegation (HOD) meeting.

The proposed Bali package was presented to Members at an informal HOD meeting at around 8.00 pm on December 6. Another informal HOD meeting was held at around 1.00 am the next day.

However, at this informal meeting, according to trade diplomats, Cuba, Nicaragua, Venezuela and Bolivia said that they could not go along with the texts.

Trade diplomats said that two issues were raised, one being a point of procedure (when Cuba was denied the floor at an earlier HOD meeting) and the other being the issue of transit under trade facilitation when the text relating to transparency and non-discrimination (the US trade embargo against Cuba) had been deleted.

(According to a trade diplomat, at the informal HOD meeting at around 8.00 pm when the draft Bali package was presented to members, Cuba, which had wanted to speak, was denied the floor. Cuba then said that it would not join the consensus in relation to the texts, according to the trade diplomat.)

An informal HOD meeting that was later scheduled for 4.30 am on December 7 was postponed to 10.00 am the same day, and this was followed quickly by the closing plenary session.

At the closing plenary, Conference Chair Indonesian Trade Minister Gita Wirjawan paid tribute to the late Nelson Mandela, and South African Trade Minister Rob Davies was also given the floor.

The Chair then proceeded to take action on a revised draft Ministerial Declaration (which was circulated on December 7 morning), the five draft Ministerial decisions, and the Bali package of ten texts. All were duly adopted to a standing ovation.

(The revised draft Bali Ministerial Declaration had added the following paragraph under the trade facilitation sub-heading: “In this regard, we reaffirm that the non-discrimination principle of Article V of GATT 1994 remains valid.”

(According to trade officials, this paragraph was included to address the concerns voiced by Cuba.)

The five draft Ministerial Decisions were on TRIPS non-violation and situation complaints, work programme on electronic commerce, work programme on small economies, aid for trade, and trade and transfer of technology.

The ten texts comprising the Bali package are the agreement on trade facilitation; general services; public stockholding for food security purposes; understanding on tariff rate quota administration; export competition; cotton; preferential rules of origin for least-developed countries; operationalisation of the waiver concerning preferential treatment to services and service suppliers of least-developed countries; duty-free and quota-free market access for least-developed countries; and monitoring mechanism on special and differential treatment.

Food security

On the critical issue of food security, paragraph one of the draft Ministerial Decision on public stockholding for food security purposes states: “1. Members agree to put in place an interim mechanism as set out below, and to negotiate on an agreement for a permanent solution, for the issue of public stockholding for food security purposes for adoption by the 11th Ministerial Conference.”

A footnote to this paragraph states that the permanent solution will be applicable to all developing Members.

The second paragraph of the draft decision on food security states: “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, compliance of a developing Member with its obligations under Articles 6.3 and 7.2 (b) of the Agreement on Agriculture (AoA) in relation to support provided for traditional staple food crops in pursuance of public stockholding programmes for food security purposes existing as of the date of this Decision, that are consistent with the criteria of paragraph 3, footnote 5, and footnote 5&6 of Annex 2 to the AoA when the developing Member complies with the terms of this Decision.”

A footnote to this paragraph states: “This Decision does not preclude developing Members from introducing programmes of public stockholding for food security purposes in accordance with the relevant provisions of the Agreement on Agriculture.”

On notification and transparency, the draft Ministerial Decision on food security states:

“A developing Member benefiting from this Decision must:

“a. have notified the Committee on Agriculture that it is exceeding or is at risk of exceeding either or both of its Aggregate Measurement of Support (AMS) limits (the Member’s Bound Total AMS or the de minimis level) as result of its programmes mentioned above;

“b. have fulfilled and continue to fulfil its domestic support notification requirements under the AoA in accordance with document G/AG/2 of 30 June 1995, as specified in the Annex;

“c. have provided, and continue to provide on an annual basis, additional information by completing the template contained in the Annex, for each public stockholding programme that it maintains for food security purposes; and´

“d. provide any additional relevant statistical information described in the Statistical Appendix to the Annex as soon as possible after it becomes available, as well as any information updating or correcting any information earlier submitted.”

With respect to anti-circumvention/safeguards, the draft decision states:

“4. Any developing Member seeking coverage of programmes under paragraph 2 shall ensure that stocks procured under such programmes do not distort trade or adversely affect the food security of other Members.

“5. This Decision shall not be used in a manner that results in an increase of the support subject to the Member’s Bound Total AMS or the de minimis (a Latin expression meaning about minimal things) limits provided under programmes other than those notified under paragraph 3.a.”´

As to the work programme, the draft decision states:

“8. Members agree to establish a work programme to be undertaken in the Committee on Agriculture to pursue this issue with the aim of making recommendations for a permanent solution. This work programme shall take into account Members’ existing and future submissions.

“9. In the context of the broader post-Bali agenda, Members commit to the work programme mentioned in the previous paragraph with the aim of concluding it no later than the 11th Ministerial Conference.

“10. The General Council shall report to the 10th Ministerial Conference for an evaluation of the operation of this Decision, particularly on the progress made on the work programme.”

A historic achievement

At a subsequent closing press conference, Minister Gita said that what was accomplished during this time represents a historic achievement – the Bali package. “These agreements will provide a real stimulus to the global economy at a time when many countries are experiencing sluggish growth and high unemployment. These benefits are real and they will be durable. Just as importantly, we have proved that the multilateral trading system and the WTO can deliver.”

“The deal that we have struck will benefit all WTO Members. It will provide new opportunities for business in our poorest members, the LDCs. Provides governments with assurance that they can implement food security programmes without fear or facing dispute action in the WTO. But it also offers a safeguard that such programmes will not be used in a manner which distorts trade and adversely affects farmers in other countries,” he said.

Developing country farmers will have enhanced market access through an improved system of administering import quotas in developed countries. The agreement on trade facilitation will streamline customs procedures by reducing unnecessary fees, paperwork and practices, said Minister Gita.

“This week has been about high level diplomacy, long nights and considerable drama. But it has also been about ensuring that the gains of the multilateral trading system reach our small businesses and our most vulnerable economies. It is moreover an international agreement that will have local impact.”

Speaking at the same press conference, Director-General Roberto Azevedo said that in recent weeks the WTO has come alive, “and that we have seen, I think, the organization the way it should be. Negotiating, dynamic, working hard to get an agreement. And in recent weeks we really lived up to our name.”

“Instead of small groups of countries negotiating in closed rooms, the entire membership came together to negotiate. And this is why all members have ownership of the outcomes. And this is why they all fought for it. And we have put the world back into the World Trade Organization.”

“We prepared a set of texts which was championed by members from all over the world, of all stages of development, and so I am delighted to say that for the first time in history, the WTO has delivered. We’re back in business,” he said.

“With these measures on trade facilitation, agriculture and development, we have achieved something very significant. People all around the world will benefit from the package that the WTO members have delivered today, especially the unemployed, the poor and the vulnerable,” said the Director-General.

In his assessment of the overall Bali package, one trade diplomat told SUNS that he can’t say that it is balanced, adding that trade facilitation is the highest denominator.

According to the trade diplomat, there remains some unfinished work that needs to be sorted out in Geneva.

What is more worrying, said the trade diplomat, is the time period for the post-Bali work programme (within the next 12 months, as set forth in the Ministerial Declaration).

If no urgency is put into that, the rest of the Doha Development Agenda risks going into oblivion, the trade diplomat cautioned.

*Kanaga Raja is Editor of the South-North Development Monitor (SUNS). This article, originally published in the SUNS, is being reproduced with the permission of Editor Emeritus Chakravarthi Raghavan. [IDN-InDepthNews – December 9, 2013]

2013 IDN-InDepthNews | Analysis That Matters

Photo credit: WTO | ANTARA

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