Bali sunrise, or is it sunset?
The assumption last week was that the World Trade Organization is dead as a negotiating forum. One article went so far as to say that all the WTO can do in the future is to serve as a permanent court for settling trade disputes. While that is a useful function, given that trade disputes have been a common cause of warfare over the centuries, the WTO does far more than solve disputes or provide a format for negotiations.
The fulmination began when WTO Director-General Roberto Azevêdo announced November 26 that the final prep meetings before the Bali Ministerial Conference had not produced agreed texts that would mean a successful conclusion to the everlasting Doha Round of trade negotiations. The Bali meetings begin tomorrow, but – even so – it is premature to rule out the idea that finalized agreements can emerge from those meetings. If such things come together, it is almost always at the last possible moment. In fact, ten sub-agreements (which might make up a Bali package) could potentially be finalized before the week is out. That is not a prediction that they will be finalized, but the possibility exists as long as negotiators are burning the midnight oil. And they are doing that.
The ten possible sub-agreements are:
- Agriculture General Services
- Public Stockholding for Food Security Purposes
- Export Competition
- Tariff Rate Quota Administration
- Trade Facilitation Agreement
- Monitoring Mechanism on Special and Differential Treatment Duty-Free and Quota-Free Market Access for LDCs
- Preferential Rules of Origin for LDCs
- Operationalization of the Waiver Concerning Preferential Treatment to Services and Service Suppliers of LDCs
Some of these seem pretty arcane, but they are tremendously important to the lives of millions of people. Perhaps the most important, because it impacts all countries, is the Trade Facilitation Agreement – designed to more fully automate the process of trade by promoting digitization and common forms over much of the world. This agreement alone could be worth billions to the global economy.
As the prep meetings ended last week, Director General Azevêdo praised the delegations:
Over the last few weeks I saw the WTO the way it should be.
You were negotiating.
You were dynamic.
You worked hard to get an agreement: engaging capitals, seeking common ground, making compromises.
You worked through weekends, around the clock. You lost sleep.
I doubt that any of the negotiators got more sleep this weekend. Their bosses want to be able to show results from their journeys all the way to Bali, so you can be certain that everything is being done to finalize all or part of this package. And a few articles coming out of Geneva give tantalizing glimpses of concessions being made and more of the text agreed. Eventually, you get to the point that the benefits of an agreement are so obvious to all players, that they become willing to play ball even on the stuff they don’t like.
But, for the sake of argument, let’s assume the worst. That trade ministers walk out of the Bali meetings in a huff with nothing to show. Acrimony will rule and the world’s media will declare the death of the WTO. Would it be true?
Not so’s you would notice. Negotiating rounds, like Doha and all those that went before, are newsworthy and rightly grab the headlines. But they are more or less a sideline among the WTO’s activities. The world’s press generally ignore the stuff that happens on a daily basis – because it usually happens smoothly and without acrimony. No blood on the floor, so no press interest.
So what is all this boring stuff? Broadly, the WTO’s work includes settlement of trade disputes, most of which never see newspaper coverage, but which can easily impact the lives of workers the world over. There were 26 dispute cases last year, pitting all sorts of countries against each other, but how many made the news? Some do make the nightly news in some places, such as the recent case brought by Canada against the European Union’s trade restrictions on Canadian fur seals. These are the sorts of things we used to send gunboats to resolve.
Then there is the WTO’s extensive work on implementation and monitoring of trade agreements. Somebody needs to keep track of whether or not countries are living up to past agreements, as well as to ensure that such agreements are operating smoothly. Yes, you could leave it up to busy-body nations such as my own, but the WTO does even-handed analysis of the agreements, what actions countries are taking, and the organization makes all that information freely available to all the concerned parties. This is why there are continuous committee meetings in Geneva on such things as technical barriers to trade, export subsidies, trade in civil aircraft, and electronic commerce. Many of the kinks in international trade get worked out in what might seem intensely boring meetings.
The WTO runs hundreds of training courses and technical assistance missions every year to help countries build their capacity to cope with the complications of trade. Just because a country joins the WTO doesn’t necessarily mean that they already know how to use it or how to respond to its requirements. The WTO provides training and advice on how to use the dispute settlement mechanism, improve customs processes, or build a product standards structure to help make trade go smoothly and efficiently. Older members don’t see all this and may not appreciate its importance. Believe me, it is highly appreciated among newer, generally less developed members with small or inefficient trade bureaucracies.
There is more to the WTO’s work, and perhaps we’ll get to some of that in future posts. But enough for now. Time to wait and watch for whatever comes out of the Bali meetings. Whatever that might be, however, the WTO’s work will continue.