WTO agrees to implement trade reform pact
GENEVA, Switzerland (AFP) — Ending months of deadlock, the World Trade Organisation (WTO) agreed yesterday to implement the first global trade reform agreement in its 19-year-history.
The deal means the 160-member global trade body can begin putting into action a landmark deal reached in Bali late last year to overhaul global customs procedures.
Economists have estimated the measures could help create US$1.0 trillion in economic activity and 21 million jobs worldwide.
“We are back on track!” an ebullient WTO Director General Roberto Azevedo told reporters.
“We have renewed the commitment to the multilateral system,” he added.
The member states adopted two texts presented Monday: the Trade Facilitation Agreement (TFA) protocol, aimed at streamlining global customs procedures, and one on the management of food stockpiles.
The two texts were agreed upon late last year in Bali, but work towards their implementation had been stalled since July, when India refused to endorse the pact unless its food stockpiles were exempted from possible punitive measures.
India and its supporters in the developing world have argued that food stockpiling is essential to ensure poor farmers and consumers survive in the cutthroat world of business.
But stockpiling and subsidies for the poor are considered trade-distorting under existing WTO rules.
India and the United States finally said earlier this month that they had resolved the row, and the WTO member states had been expected to seal the deal.
The member states agreed yesterday to try to find a permanent solution to the stockpile issue by December 2015.
Azevedo stressed though that the UN trade body needed to act fast to implement yesterday’s agreement.
“We have lost precious time since July, and it goes without saying that we can’t wait another two decades to deliver further multilateral outcomes,” he told trade diplomats in Geneva.
Two-thirds of the WTO’s members must ratify the TFA before it can take effect, he pointed out, urging countries to hasten the procedure.
Diplomats hailed the deal to put the TFA into action.
EU Trade Commissioner Cecilia Malmstroem said it had the potential to “help developing countries better integrate into the global economy, intensify regional integration and lift millions out of poverty”.
US trade representative Michael Froman also celebrated the deal, which he described as “a critical step forward by breaking the impasse that has prevailed since July”.
“I am pleased that the United States was able to work with India and other WTO members to find an approach that preserved the letter and spirit of the package of decisions reached at last year’s Bali Ministerial Conference,” he said.
TFA, he said, was the “perfect example of how breaking down barriers to trade can unlock new opportunities for developed and developing countries alike, and it’s a particularly important win for small and businesses in all countries.”
“With this win under the WTO’s belt, we can once again focus our efforts on revitalising the organisation’s core negotiating functions,” Froman said.
Azevedo agreed that the diplomats “should be pleased that our work is back on track”, but stressed that “this is where the real work begins”.
The 160 countries which make up the WTO set trade rules among themselves in an attempt to ensure a level playing field and spur growth by opening markets and removing trade barriers, including subsidies, excessive taxes and regulations.
Bali was the first multilateral agreement concluded by the WTO since its inception in 1995.
It also signalled the first concrete progress on the Doha Round of trade liberalisation talks, launched in 2001 and aimed at underpinning development in poorer nations.
The lack of progress had led to countries increasingly pursuing bilateral or multilateral trade deals, and the relevancy of the WTO was under a dark cloud until the Bali deal was negotiated.
Yesterday’s agreement once again opened the way for negotiations on the remainder of the Doha agenda, which was not agreed upon in Bali.
The member states had agreed on a new July 2015 deadline to decide on a work programme for those talks, Azevedo said.
It will likely take a while to complete those negotiations. It took nearly a decade to conclude the trade facilitation portion, which began in 2004.
“We have delivered today on a promise we made in Bali,” Azevedo told trade diplomats yesterday.
“Now let’s make it count.”