The real winners at Bali

• At the 9th Ministerial meeting (on December 6th, 2013) at Bali in Indonesia, trade Ministers, representing the 159 members of the World Trade Organization (WTO), managed to reach an agreement. The fact that an agreement was finally possible was seen as more significant than the issues on which a consensus was reached. This is because the WTO and the Doha round, in particular, was losing its relevance off-late.
• Days before the Bali meet, discussions, among trade officials, were leading to nowhere. It was widely feared that the Bali ministerial would go the way of all its predecessors.
• The Doha development round was launched way back in 2001, soon after the terrorist attack in the U.S. in a bold move to infuse confidence in world trade. There were number of negotiations that took place during the 12-long years yet it failed to produce a single agreement.
• WTO’s relevance, especially Doha negotiations and the very basis of multilateral trade that the WTO has been propagating was being questioned. Thus, as member-countries started reposing faith in bilateral agreements among countries and regional pacts to reap short-term gains, world trade was getting divided, making the eventual move towards multilateral trade that much more difficult. India and other developing countries, even while actively pursuing the bilateral route and regional pacts, had every reason to worry over the long-term consequences of the drift away from multilateral trade.
• In many ways, the Bali agreement was driven by a fear that the big emerging economies would be left out of two giant trade pacts in the offing. Specifically, the U.S. and the EU have launched negotiations to conclude a trans-atlantic trade agreement. Japan and ten other Pacific Rim countries are getting close to finalising a Trans-Pacific Partnership. India, Indonesia, Brazil and Russia were unlikely to figure in the above pacts. But with a revived WTO, now the emerging economies can have a voice in the global trade.

Role of the new WTO Secretary-General, Roberto Azevedo:

• The role of the new WTO Secretary-General, Roberto Azevedo, has been very significant. Before the Bali meet, there were apprehensions that a career diplomat from Brazil, a developing country, would not quite fit the role. Neither the E.U. nor the U.S. had backed his candidature unequivocally. In these circumstances, Mr. Azevedo pulled off a deal, which, under WTO rules, requires unanimous support from all members.
• A revived WTO is good for all countries. Its success in years to come will depend how the more intractable parts of the Doha round are taken care of.

Implications on India:

• The Bali Declaration has major implications for India and other developing countries. Of the two main issues ‘food security’ and ‘trade facilitation’ on which the agreement was reached, the former concerns India and other developing countries, which need to subsidise food for the poor, while the latter is significant for developed and developing countries
• The core discussions on agriculture centred on two viewpoints on the price benchmark for the valuation of food stocks that a country can legally hold. India wanted current prices to be the basis, but that was not acceptable to the U.S. and many others. Among other reasons, it would involve amending the Uruguay Round agreements. India, as an alternative, proposed an interim solution.
• The U.S. suggestion for a sunset clause of four years was not acceptable to India. A final deal was struck to have an interim agreement until a more permanent arrangement was worked out. So, obviously, many more rounds of discussions are on the cards.