Bali agreement keeps WTO talks alive

Bali agreement keeps WTO talks alive

Multilateral agreement struck by WTO members addresses key issues with regard to ag trade.

THE mini-package multilateral agreement made at the ninth ministerial conference of the World Trade Organization's Doha Round, held Dec. 5-7 in Bali, Indonesia, helped establish a pathway forward after the round has languished since 2008.

Overall, the agreement takes important steps to address some key issues with regard to agricultural trade, including promoting food security, facilitating competition and enhancing exports, but it still leaves many significant issues unresolved.

"For the first time in our history, the WTO has truly delivered," WTO director-general Roberto Azevedo said.

Earlier in the year, trade facilitation was considered a "win-win agreement" that could easily be agreed upon by members. Although there were some obstacles to overcome in reaching an agreement, the Bali deal offers ways to streamline procedures at borders and customs, which, in the end, will help move products more easily, explained Dave Salmonsen, American Farm Bureau Federation senior director of congressional relations.

U.S. Trade Representative Ambassador Michael Froman said the potential cost reduction of the trade facilitation measures in this agreement are estimated to be 10% for developed countries and around 15% for developing countries.

"Studies indicate that for every 1% in cost reduction, worldwide income increases by more than $40 billion, (with) 65% accruing to developing countries," he said. Some studies estimate that the trade facilitation agreement will result in global gross domestic product gains of nearly $1 trillion, Froman added.

U.S. Grains Council director of trade policy Floyd Gaibler was on the scene at the Bali meeting defending the interests of U.S. feed grain and co-product producers.

"Trade facilitation measures that reduce transaction costs and red tape should improve overall trade benefits, including agriculture-related products," Gaibler noted.

The outcome achieved reaffirms the call to eliminate export subsidies and reduce maximum repayment periods for export credits. The decision will level the playing field in world markets for countries such as Canada and the U.S., including for exports of beef and pork.

Export competition in WTO specifically covers agricultural export subsidies, agricultural export credits, food aid and the operation of agricultural exporting state trading enterprises (STEs).

A USTR fact sheet explained that the new decision on export competition will require transparency to help WTO members understand how their trading partners are proceeding toward this commitment.

"This is most meaningful with regard to state trading enterprises, where transparency is currently limited," USTR said. "The (Bali) export competition result also ensures a balanced approach across all forms of export competition, including export subsidies, export credits, food aid and STEs."

USTR said this component of the agreement provides an "important impetus" for members to resume the WTO agriculture negotiations, which address the pillars of market access and domestic support, along with export competition.

WTO members established an interim food security program that will allow countries with existing food stockholding programs, such as India, to continue to operate those existing programs even if they exceed or will result in exceeding their allowable domestic subsidies for an interim period until a final agreement is reached.

"While the agreement sets a target for reaching a final solution in four years at the 11th WTO ministerial, it is not a binding duration," Gaibler noted.

Gaibler added, however, that the agreement requires strong transparency and safeguard provisions, including protections to ensure that the operation of food stockholding programs will not distort trade or food security for other countries.

The agreement also carries new and stronger disciplines for the administration of tariff quotas that will create new opportunities for agricultural exporters. USTR said this component facilitates increased opportunities for U.S. farmers, ranchers, workers and food processors to enhance exports to a number of WTO member countries, including the European Union, Japan, Norway and Switzerland.

Agriculture & Agri-Food Canada reported that tariff quotas will now be subject to a more intensive and structured new review to address chronically low import volumes or "underfill."

"We have seen instances of low underfill in wheat, pulses, canola seed and pork. These changes will create new opportunities for Canadian agricultural exporters," an agency statement noted.


Steps forward

The Bali package is a selection of issues from the broader WTO Doha Round. Echoing calls from many delegations, Azevedo said members' attention should now turn to the rest of the round, known semi-officially as the Doha Development Agenda. He said the package instructs members to prepare, within the next 12 months, a clearly defined work program to complete the Doha Round.

Salmonsen explained that "work program" is WTO lingo for a plan for the future in different areas, including what to bring up and how to address it.

Negotiators told WTO members that the package was needed because of the direct benefits it would offer and also because it would reinvigorate WTO and its trading system and provide the momentum to conclude the Doha Round, which was launched in 2001 and has seen little progress since 2008 until work intensified on the Bali package this year.

"Time will tell if this is a springboard to something else," Salmonsen said, explaining that the world is watching to see if the work done at the ministerial meeting was the end of the Doha Round or the beginning of something else or if it will bring new consideration to issues that have come up since the round started.

Volume:85 Issue:51

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