Global trade pact in sight

Trade Or­gan­i­sa­tion’s fu­ture in the bal­ance

Weekend Argus (Saturday Edition) - - BUSINESS - RANDY FABI and TOM MILES

THE first global trade re­form since the cre­ation of the World Trade Or­gan­i­sa­tion was ready for agree­ment by min­is­ters from the body’s 159 mem­ber coun­tries late yes­ter­day, sources in­volved in the talks said.

The or­gan­i­sa­tion’s di­rec­tor­gen­eral Roberto Azevedo has drafted a text that he will sub­mit to the full mem­ber­ship, sig­nalling that he be­lieves he has found terms that are ac­cept­able to all mem­bers, in­clud­ing In­dia which had raised vo­cal ob­jec­tions over agri­cul­ture.

Bar­ring any last-minute veto, the deal aims to slash red tape at cus­toms around the world, give im­proved terms of trade to the poor­est coun­tries, and al­low de­vel­op­ing coun­tries to skirt the nor­mal rules on farm sub­si­dies if they are try­ing to feed the poor.

It would also re­vive con­fi­dence in the or­gan­i­sa­tion’s abil­ity to ne­go­ti­ate global trade deals, af­ter a string of fail­ures that left the body at risk of slid­ing into ir­rel­e­vance.

“We are very close,” spokesman Keith Rock­well told re­porters at the meet­ing in Bali.

“As things stand now, the prospects are promis­ing.”

On Wed­nes­day, a deal that would add hun­dreds of bil­lions of dol­lars to the world econ­omy by some es­ti­mates teetered on the brink of col­lapse.

In an or­gan­i­sa­tion based on con­sen­sus among all of its mem­bers, at­ten­tion fo­cused squarely on In­dia as the main stum­bling block to the or­gan­i­sa­tion’s first global trade deal in two decades.

In­dia has in­sisted it would not com­pro­mise on a pol­icy of sub­si­dis­ing food for hun­dreds of mil­lions of poor, putting it at odds with the US and other de­vel­oped coun­tries.

Azevedo, a for­mer Brazil­ian trade ne­go­tia­tor, told del­e­gates at the start of the last day of talks that there was more work to be done, but sounded up­beat on prospects for suc­cess.

“He told mem­bers they were now very close to some­thing that has eluded us for many years and that the de­ci­sions over the next few hours would have great sig­nif­i­cance be­yond this day,” the spokesman said.

It is 12 years since the or­gan­i­sa­tion launched the Doha Round, which failed to yield con­crete re­sults, and many ex­perts had warned that fail­ure in Bali would leave re­gional and bi­lat­eral trade ar­range­ments as the only av­enue for trade re­form, di­vid­ing the world and re­vers­ing the glob­al­is­ing goal of the or­gan­i­sa­tion.

A Bali trade deal, which is far less am­bi­tious than the Doha Round, would open the way to much wider trade re­forms and en­able the body to mod­ernise its rules for the in­ter­net era.

The “all or noth­ing” agree­ment cov­ers sev­eral ar­eas, the largest of which is trade fa­cil­i­ta­tion – a global stan­dard­i­s­a­tion and sim­pli­fi­ca­tion of cus­toms pro­ce­dures that would tear down bar­ri­ers to cross-bor­der move­ment of goods.

The deal also in­cludes lim­ited re­forms in agri­cul­ture, in­clud­ing re­duc­ing ex­port sub­si­dies, open­ing bor­ders to least de­vel­oped coun­tries, and the food sub­sidy pol­icy cham­pi­oned by In­dia, which proved the big­gest ob­sta­cle.

“We are try­ing to get jus­tice for the poor peo­ple,” In­dian Trade Min­is­ter Anand Sharma said as he en­tered the fi­nal day of the meet­ing. In­dia will next year fully im­ple­ment a wel­fare pro­gramme to pro­vide cheap food to 800 mil­lion peo­ple that it fears will con­tra­vene the or­gan­i­sa­tion’s rules cap­ping farm sub­si­dies to 10 per­cent of pro­duc­tion.

If talks were to fail, the or­gan­i­sa­tion may see its role eroded by re­gional trade pacts now be­ing ne­go­ti­ated, such as the US-led 12-na­tion Tran­sPa­cific Part­ner­ship and a USEU tie-up known as the TTP. – Reuters

PIC­TURE: LEON LESTRADE

PORT OF PLENTY: An in­creas­ing num­ber of oil sup­ply ves­sels and rigs are us­ing Cape Town har­bour for re­pairs and re­fur­bish­ment.

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