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The 2013 WTO Bali Ministerial: Prospects and New Horizons

From Brookings by Jonathan Meltzer:

On December 3, trade ministers from members of the World Trade Organization (WTO) will begin three days of meetings in Bali, Indonesia for the ninth WTO Ministerial Conference—the fifth Ministerial Conference since the launch of the Doha Round of trade negotiation in 2001.  And yet, concluding the Doha Round is not a goal of this Meeting. Instead, the aim is to finalize some key elements of the Round. A successful outcome at Bali, while short of the full Doha Round, will give the WTO a needed boost of confidence. As U.S. Trade Representative Michael Froman recently observed, “in the WTO’s record: in its nearly twenty-year history, the WTO has never once produced a new, fully multilateral trade agreement.”[1]A successful outcome at Bali will also raise the question of what is next for the Doha Round—whether to conclude the outstanding issues on the Doha Round, introduce new trade issues for negotiation or accept a period of stasis as countries seek to conclude mega-regional free trade agreements (FTAs) such as the Trans Pacific Partnership (TPP) negotiations and the Trans-Atlantic Trade and Investment Partnership (TTIP) negotiations.

 

The WTO Bali Package

The elements of the Doha Round that are likely to be finalized at the WTO Ministerial in Bali are trade facilitation, agriculture and duty-free quota-free market access for the least developed countries (LDCs). The United States has made clear that these issues need to be considered as a package, so failure to agree on any one issue will likely lead to failure on all three issues.[2] While not formally part of the Doha Round there are also other issues on the agenda for the meeting, the most important of these being expansion of the WTO International Technology Agreement (ITA).

 

An agreement on trade facilitation will produce the most significant economic benefits for all WTO members.  According to one report, the gains from an ambitious outcome on trade facilitation could increase global gross domestic product (GDP) by close to $1 trillion annually with the majority of gains going to developing countries.[3]  Such an agreement would improve the efficiency and reduce the costs of moving goods through customs by adopting measures such as digitizing customs procedures and greater transparency. Success here is likely, as in addition to the economic gains there are no significant domestic losers from trade facilitation, which should make the domestic politics for each country easier to manage. That said, some countries are still insisting on being “paid” for trade facilitation. And special and differential treatment will need to be extended to developing countries to address concerns that they do not possess the technical capacity to implement customs reforms.

 

Negotiations on agriculture are also progressing. This includes new disciplines on export subsidies and tariff rate quotas for agriculture. Food export control is another issue under discussion. Here, the rising food prices from 2006 to 2008 and the use of export controls by some countries in response exacerbated the global under-supply of agricultural products, contributing to increasing global food prices and highlighting the need for a multilateral solution to this issue.[4]  

 

 The third leg of a Bali package—duty-free quota-free trade for least developed countries—should be the easiest.  Many developed countries including the United States and the European Union already provide tariff preferences for imports from LDCs under legislation such as the Africa Growth and Opportunity Act in the U.S. and Everything But Arms in the EU. Emerging countries such as India and China are also expanding preferential access for LDCs. However, some of these programs do not cover all LDC exports or are limited by restrictive rules of origin, so reform of these programs will be necessary.

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