According to new World Trade Organization Director-General Roberto Azevedo, the WTO is very close to an agreement on a global reform trade package by the end of the month. This deal, the Bali Package, would primarily address three concerns: bureaucratic barriers in trade negotiations, agriculture issues and development topics.
In agriculture, negotiators have agreed to converge on an interim, due-restraint, solution that would allow countries to take measures to address their food security concerns, while ensuring that market distortions are kept to a minimum. However, agreement has yet to be reached on other important aspects such as customs cooperation, customs brokers, pre-shipment inspection, and certain transit issues.
Whereas the Doha Round talks to reduce global trade barriers have been stuck in neutral for close to a decade due to disagreement between the developed and developing world over agricultural issues, the Bali package could resolve this impasse by streamlining customs procedures worldwide and making border-crossing processes more predictable and transparent. Currently, trading across borders can be a costly and time-consuming endeavor that only big firms with access to resources and economies of scale can afford. The Bali Package would bind WTO Members to agreed-upon trade facilitation measures that cut red tape and streamline customs procedures. This would offer new and economically-viable opportunities for cross-border trade to businesses of all sizes.
According to studies by the World Bank and the Organization for Economic Cooperation and Development (OECD), such an agreement is expected to add approximately $1 trillion to annual global trade.
While potential issues may still arise, Azevedo is confident that the group will be able to successfully reach a decision before the Ministerial Conference convenes in December in Bali. This would be a momentous win for the WTO. Critics have been questioning the WTO’s relevance for years due to its inability to secure any international pacts for more than a decade. As globally-significant trade agreements are being negotiated both in the Atlantic and Pacific, the WTO is under pressure to deliver. A successful Bali Package would send a clear message that the WTO is still capable of facilitating negotiations on a multilateral level and delivering tangible results.
Jordan Smith is an intern in the Global Business and Economics Program.