WTO Limps towards Bali, 12 Nov Deadline Extended to 21 Nov to Ink Deal

Negotiators in Geneva have just a few days left to finish putting together a “Bali package” ahead of next month’s WTO ministerial conference, after Director-General Roberto Azevêdo announced on 12 November, that he would be extending their original 12 November deadline.

The trade chief was originally expected to announce at Tuesday’s meeting of the Trade Negotiations Committee (TNC) whether a deal in Bali would actually be achievable. While members are far closer to a deal than they were a few months ago, Azevêdo confirmed this week, they are still toeing a dangerously fine line between success and failure, with the outcome of the past two months of negotiating too close to call.

Instead, the Director-General announced that he would be giving negotiators an additional few days to sort out their differences, which traverse all three areas of the proposed Bali package - trade facilitation, agriculture, and development. The upcoming week, he said, will be a “last-ditch” effort to rescue the talks before the organisation’s ministerial conference kicks off on 3 December.

A meeting of the WTO’s General Council, which is the organisation’s highest decision-making body outside of the ministerial conference, has now been set for 21 November, at which point it should be clear whether or not Geneva-based officials will have a package to transmit to their ministers. A formal TNC is likely to be held before then, in line with WTO procedures.

Race to the finish

The Bali ministerial comes as the organisation faces growing questions over its role, in a changing trade climate where preferential agreements- such as the Trans-Pacific Partnership or the Trans-Atlantic Trade and Investment Partnership - have been increasingly capturing the limelight. Should a deal be confirmed for Bali, it would mark the first major advance in the Doha Round negotiations in several years.

The Bali package, as proposed, includes a small subset of the Doha agenda. Its key feature would be an agreement on trade facilitation, a topic that was formally added to the Doha negotiating mandate in 2004. The proposed Bali deal would also include select elements relating to agriculture, along with a few issues of relevance to the organisation’s developing and least developed country members.

As the December meeting has drawn closer, however, difficulties have emerged, leading the so-called “Bali package” to be slowly whittled down over the past few months as negotiators try to put together a “realistic” - though potentially less ambitious - outcome. Proposals relating to special and differential treatment (S&DT), such as the “Cancun-283 and six Agreement-specific S&DT proposals, were eventually dropped from the proposed deal. Meanwhile, other topics that initially looked easily resolved have met with unexpected hurdles, while long-standing disagreements in other areas have proven difficult to overcome.

WTO members and the Director-General alike have stressed that Bali cannot be a “negotiating ministerial,” and that all outstanding issues must be resolved in Geneva, leaving only political topics for the December conference.

Customs cooperation involves how to exchange information between importing and exporting authorities of member countries, in order to address fraud. The topic has been difficult because of concerns such as how to handle the increased volume of requests for such data. Given its sensitive nature, it has lately been treated as its own “pillar,” even though it falls under the broader “Section I” heading of the trade facilitation draft text.

Developing countries have long said that they need definite assurances that they will receive the support needed to implement some of the new commitments being negotiated in Section I. Otherwise, they say, putting these into practice could prove both difficult and costly.

Developed countries, meanwhile, have stressed that Section I commitments must be binding in order for the deal to provide the hoped-for increases in trade flows.

Agriculture

The agriculture dimension of the Bali package involves three proposals: two from the G-20 coalition of developing countries, and one from a separate developing country group known as the G-33.

With regards to the G-33 proposal, which deals with allowing food purchases at administered prices in developing countries as part of public stockholding programmes, members have spent the last several weeks fine-tuning the details of a so-called “peace clause.” This legal mechanism would commit members to not bring legal disputes in this area against countries that wish to use the above-mentioned flexibility.

Though there has been a level of “constructive engagement” in recent discussions, Azevêdo said, questions remain over how long this “interim solution” will be in place and what safeguards other countries would be able to use in order to protect their own producers from trade distortions. A term of four years has been discussed by members, while others insist that this is too long, sources close to the talks told Bridges.

However, the G-20 proposal on how members manage their tariff rate quotas (TRQs) - which are used by some countries to charge higher tariffs on goods being imported after an initial quota has been filled - is “a different story,” Azevêdo reported.

The TRQ proposal had initially been welcomed as one of the more “calibrated” agriculture proposals on the table. Since then, a stand-off between the US and China has emerged on the special and differential treatment (S&DT) provisions for developing countries outlined in this proposal, specifically on how reforms will be enforced.

Members remain divided on the ambition sought by the G-20 in a proposal on export competition. The group has called for an elimination of export subsidies as envisioned in earlier Doha Round documents, while those providing the payments insist that these need to be dealt with as part of a broader trade deal.