India's Commerce and Industry Minister Anand Sharma arriving WTO meeting.
NUSA DUA: Ministers appeared close to sealing the world’s biggest trade reform for two decades early yesterday after India, the most vocal holdout, endorsed a draft text presented by the head of the World Trade Organisation.
The deal, thrashed out at talks on the Indonesian island of Bali, would lower trade barriers and speed up the passage of goods through customs. Analysts estimate that over time it could boost the world economy by hundreds of billions of dollars and create more than 20 million jobs, mostly in developing countries.
Failure would have represented a body blow to the 159-nation WTO, formed in 1995 and still without a major trade deal to its credit after many years of negotiating fiascos.
“It is a victory for the WTO and for the global community to have arrived at a mature decision,” Indian Trade Minister Anand Sharma told reporters. “We are more than happy. It is a great day. It is a historic day.”
The deal requires unanimous support, and a potential veto could still come from Cuba, whose representative banged the table and shouted at WTO chief Roberto Azevedo after the meeting where his draft agreement was distributed to all the members, a participant at the meeting said.
Cuba has been consistently demanding the United States lift its economic embargo of the Caribbean island as part of the Bali agreement, but trade diplomats say it has made the same demand for decades and they do not expect it to block a deal.
Heads of delegation were to resume informal talks in the early hours today, but a diplomat said the meeting had been delayed by an hour because of last-minute concerns about the wording of a compromise on food subsidies.
That is the vital issue for India, which this year announced a massive programme for stockpiling food to feed to the poor, in breach of the WTO rules on subsidies.
Another diplomat said the delay was caused by Cuba consulting with Azevedo.
Azevedo, a Brazilian diplomat, took the helm of the WTO in September and immediately launched a punishing regime of round-the-clock talks and “whatever works” diplomacy. Even so, the outcome had appeared in grave doubt as recently as Thursday.
If agreed, the reform would slash red tape at customs around the world, give improved terms of trade to the poorest countries, and allow developing countries to skirt the normal rules on farm subsidies if they are trying to feed the poor.
It would also revive confidence in the WTO’s ability to negotiate global trade deals, after it consistently failed to clinch agreement in the Doha round of talks that started in 2001 and proved hugely over-ambitious.
As the Doha Round stuttered to a halt, momentum shifted away from global trade pacts in favour of regional deals such as the Trans-Pacific Partnership that the United States is negotiating with 11 other countries, and a similar agreement it is pursuing bilaterally with the European Union.
Failure in Bali would have led to a more divided world, with regional blocs reversing the WTO’s globalising goals, some experts say. The “Bali package” now on the table secures a handful of elements of the Doha Round that were thought to be doable and declares a “strong resolve” to pursue agreement on the rest.
India’s concerns that the Bali deal would give only a temporary shield to its food stockpile plan were resolved with wording that promised a search for a more permanent solution. Reuters