Bali Meeting Seeks to Save Deal on World Trade

Trade ministers from around the world gathered on Tuesday, 3 December on the Indonesian island of Bali to begin talks seen as critical for attempts to liberalise global trade.

The Ninth Ministerial Conference of the World Trade Organization (WTO) aims to simplify international customs procedures, reduce agricultural subsidies and offer aid for the poorest countries.

The International Chamber of Commerce has forecast that a deal in Bali would lead to 21 million new jobs, mostly in developing countries, and create an incentive for investments worth $960 billion.

A successful conclusion to the four-day summit could also revive the stalled Doha round of talks on creating global standards for trade.

Many participants believe however that a failed meeting could further harm the WTO’s significance as a global trade forum.

Some countries, including India, have raised objections to parts of the so-called Bali package, leaving prospects for an agreement uncertain.

WTO Director General Roberto Azevedo called on representatives of the 159 WTO member states to show willingness to compromise.

India Talks Tough, Risks Failure of WTO Bali Meet - Rejects 'Peace Clause', TFA in Present Form

A visibly piqued commerce and industry minister Anand Sharma on 4 December talked tough, rejecting the proposed Peace Clause (PC) and Trade Facilitation Agreement (TFA) in its present form. Mr. Sharma called for immediate reforms even as his stance risked an imminent failure of the ninth ministerial conference (MC9) of World Trade Organisation (WTO).

In his address to the plenary session of the WTO MC9, Sharma stood out compared to other 126 trade ministers, who elucidated their respective positions on moving forward the stalled round of Doha global trade talks and their strategy for the MC9, which is underway at the quaint Indonesian island.

The PC or ‘Due Restraint Clause’ that seeks to allow unrestricted food subsidies by developing countries for their farmers has been at the centre of much controversy in India. While India is not opposed to the PC per se, it wants the measure to continue as long as a permanent solution is not completely achieved and not merely for 4-years which has been proposed.

The due restraint provision in its current form cannot be accepted. It must remain in force till we reach a negotiated permanent solution and provide adequate protection from all kinds of challenge,” Sharma said.

Presently, as per the draft negotiating text, the PC is immune only from challenges arising out of the Agreement on Agriculture (AoA) and not from the Agreement on Subsidies and Countervailing Measures (ASCM).

Mr. Sharma demanded a “firm post Bali work programme” that will seek to bring a permanent solution before the eleventh MC, expected to take place in 2017.

“Let Bali be remembered for bringing development back into the focus,” Mr. Sharma asserted.

However, an echo to India’s position could not be heard from fellow developing countries that comprise the G33 coalition, which had proposed food security to be taken up for negotiations in the present MC.

Brazilian trade minister Luiz Alberto Figueiredo Machado while agreeing that certain concerns areas still remain did not rule out a “positive outcome” of the Bali talks while hinting at greater show of flexibility from other developing countries.

“Our constituencies cannot afford that WTO continues to nibble on the development agenda … Though we did hope for more in the food security programme, it is also essential that we move forward and reach an agreement on the Bali package,” he said.

Chinese commerce minister Gao Hucheng urged “confidence and commitment” in the Bali package while urging ministers to move forward.

On Ministerial eve, India stands alone in Bali

India stands isolated at the Bali Ministerial of the World Trade Organisation (WTO) in its efforts to seek safeguards for subsidies poor countries give to their farmers for food security purposes.

Of the key G33 countries, China, an exports-led economy, has not lent vocal support to the India’s position for a Bali package as its interests lie with the G20 proposal on trade facilitation. Pakistan has opposed India’s proposal for subsidies to poor farmers on the grounds that they distort trade in rice. “India exports only basmati for which MSP is not given to farmers,” said official sources. Some support for India has come only from Indonesia.

On Monday, India blamed the rich countries led by the United States for negotiations for a Bali package having hit the wall. India has also accused the rich countries of double standards on the issue of subsidies for farmers.

Commerce and Industry Minister Anand Sharma, who leads the 30-member Indian delegation for the Ministerial conference, said in his address to the G33 at Bali on Monday: “It is ironic that let alone trying to address this crucial issue, the developed countries demonstrated little appetite even to discuss it”.

He said, “It is unfortunate that even though the G33 has shown flexibility by agreeing to discuss an interim solution, there were efforts to make the solution redundant through elaborate procedural formalities in the name of safeguards against trade distortion and transparency.”