The First Global Trade Pact under the Framework of the WTO Signed at Bali

A breakthrough for the Doha talks has been made, with China playing a positive role at them.

"After days and nights of negotiation, we reached a consensus ... For the first time in our history, the WTO has truly delivered," commented were made by WTO Director-General Roberto Azevedo, who was almost in tears over the hard-won success.

"Bali is the morning of the world. Let me embellish it: Bali has given a new morning to the WTO," said Gita Wirjawan, chairman of the ministerial conference and Indonesia's trade minister, with both tears and smile.

Postponed for 20 hours, the WTO Ninth Ministerial Conference finally concluded on December 7, 2013 on the Indonesian island of Bali. The conference marked the first major agreement between WTO members since it was first formed 18 years ago. Possibly because previous negotiations often resulted in deadlock, and they had waited too long, the closing ceremony of the Bali meeting was full feelings. At the moment when the Bali Ministerial Declaration was adopted, all the ministers present stood delivered a standing ovation. Sleepless negotiators, staff and media reporters embraced each other and took group photos, many of them even turned their backs to hide their tears as they silently wiped them from their faces.

Just as Azevedo said, the WTO crossed the finish line in Bali, and the results can be attributed to all the members.

"The Bali Package will inject new vitality into the slow recovery of world economic growth and benefit the developing countries."

The Bali Package is the sweetest fruit to come of the meeting. The package, consisting of 10 documents, covers reducing the cost of moving goods through customs borders, an agriculture package that allows governments to run food security programs without being criticized for breaching WTO commitments, and reaffirmation of the commitment to duty- and quota-free access to markets for less developed countries among other decisions.

Agreement on the trade facilitation of the Bali Package requires setting up a "single window" to simplify customs procedures. The WTO will soon establish a preparatory committee to stage a legal review of the agreement to ensure that its relevant clauses will come into force before July 31, 2015. Regarding the decisions over agriculture under the Bali Package, a series of agriculture-related services will be provided to developing countries as well as shielding for public stockholding programs that deal with food security in developing countries under a certain conditions. The package agrees to improve market access for cotton products from less developed countries, and to provide development assistance for production in those countries. Regarding development issues, the Bali Package agreed on duty- and quota-free access for less developed countries to export to richer countries' markets; simplifying preferential rules of origin for less developed countries; allowing less developed countries preferential access to richer countries' services markets; and building a monitoring mechanism that consists of meetings and other methods for monitoring special treatment given to developing countries.

Analysts generally believe that the agreement will inject new vitality into the slow recovery of world economic growth and benefit developing countries. The International Chamber of Commerce estimates the agreement will inject $960 billion into the global economy and create 21 million jobs, 18 million of them in developing nations.

Officials from the Chinese delegation told the People's Daily that the Bali Package was built on a consensus reached by 12-year-long negotiations, and it will help to build confidence in the WTO negotiation mechanism and create favorable conditions for the negotiations taking place at the remaining Doha Round talks.

During the negotiations, China has always played a positive role and showed its flexibility as much as possible. China has taken the lead in giving up its own assistance during negotiations over trade facilitation, leaving assistance resources to other developing countries and striving to participate in South-South cooperation. China also proposed a compromise bill concerning the food security issue and showed the maximum possible flexibility during custom quota negotiations, which China's own national interests are very sensitive to. It also paid more attention to the concerns of less developed countries on development issues and took concrete steps towards the cotton and "duty- and quota-free access" issues.

"If even one country has dissenting opinion to even a small technical problem, the whole package cannot be signed."

Despite being called the "early harvest" or "Doha lite," as WTO decisions are made on a basis of consensus and even one member refusing can prevent the whole deal passing. If even one country has dissenting opinion to even a small technical problem, the whole package cannot be signed.

As early as the regular work negotiations period in Geneva, the widely anticipated final document of the agreement was vetoed after representatives were unable to come to an agreement on some clauses. Although some details of the package regarding trade facilitation and agriculture issues have not yet been decided, how to bridge the differences concerning grain subsidies is widely believed to be the pacing factor for the agreement.

The Food Security Act of India, which was approved in September 2013, requires $20 billion every year for public grain storage that will cover two thirds of the Indian population. With continually rising grain prices, the Indian government's practice has surpassed the upper limit of grain subsidies of the WTO. As India worried the compromising proposal raised during the Geneva negotiation could not ensure its food security, India has taken a hard-line stance over the issue and stressed that there is no room for negotiation on agriculture as it relates to the lifeline of developing countries. The difference over the agriculture issue between the United States and India has been regarded as the largest difficulty facing the negotiations.

To overcome this difficulty, Azevedo and Gita Wirjawan convened two days of negotiations with Indian and U.S. representatives. The two countries finally agreed to reach a permanent resolution on grain subsidies within four years. During the four-year interim period, developing countries will not be punished even if they surpass the upper grain subsidy limit set by the WTO. They also agreed that the grain purchased by their governments cannot be exported due to the risk of disturbing the global market.

However, just when concerned parties felt relief, Cuba and three of the Latin American members - Nicaragua, Bolivia, and Venezuela - raised disagreements over relevant items of transit trade, which has regenerated uncertainties over the outcome of achievements. This further delayed the closing session. After hard negotiations lasting through the night, the conference finally decided to add new clauses to the agreement, reiterating that the Exceptions to the Rule of Non-discrimination of the Article Five under the General Agreement on Tariffs and Trade (GATT 1947) would remain valid.

"It always seems impossible until it's done," WTO Director General Azevedo said, quoting former South African president Nelson Mandela, while describing the negotiations over the past two days.

"Bali is just the beginning, which offers us sufficient confidence to resolve issues that have long been delayed."

The success of the Bali conference marks a turning point for the Doha Round Negotiations. Azevedo told reporters after the meeting, "Bali is just the beginning, which offers us sufficient confidence to resolve issues that have long been delayed." Within the next year, the WTO Trade Negotiations Committee will establish clear work plans on the remaining issues of Doha Development Agenda based on the agreement, and the committee will give the agriculture and development issues of facing less developed countries priority.

Swagger, an expert from the economic research center for the Indonesian Institute of Sciences said that Bali Package of Agreements will help bring the WTO back into the center of international trade negotiations. At the moment however, the problem of inefficient decision-making of the organization is very prominent. "In the long run, it is imperative for the WTO to reform. How to improve decision-making efficiency, turn the existing agreements into concrete results, need the joint efforts of all members."

Officials from the Chinese delegation said that China is willing to work together with other parties to push the Doha Round negotiations forward on the basis of existing achievements. China will help to maintain the multilateral trading system's status as the main channel for international trade and to make the multilateral trading system play an important role in global economic governance.

During interviews the reporter found that, despite ups and downs as well as many difficulties during the negotiation process, no member of the WTO renounced the Doha Round negotiations and the multilateral trading system. All parties have stressed that as the basis of trade liberalization and facilitation, the multilateral trading system with the WTO at its core cannot be replaced.

Raed Safadi, Deputy Director of the Trade and Agriculture Directorate of the Organization for Economic Cooperation and Development (OECD), told People's Daily that the advantages of regional trade arrangements lie in their high efficiency and fast growth, but it is also costly, strongly blockaded, and the rules vary. It is difficult for less developed countries to participate in this. While the multilateral trading system is able to effectively enhance the trade levels of both the developing countries and the less developed countries, which is conducive to realizing win-win cooperation between all parties.


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