Why is it a historic deal?
The Bali round of WTO is historic because the World Trade Organization has reached its first ever global trade reform deal, approved by 160 ministers after 12 years of stuttering through negotiations. The conference has successfully managed to push for a deal, which while representing a tiny fraction of what was set to be inked in the Doha round of talks stalled since 2001, paves way for significant trade reforms. Cuba which had threatened to veto the package of measures as it didn’t include a subtraction of the US embargo relented on its stance last minute, paving the way for the deal to be clinched according to Reuters. This agreement rescues the WTO from a threat of obsolescence that was anticipated with several regional trade pacts being pursued by countries individually.
What does it do to global trade?
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The deal seeks to lower barriers to trade worldwide through a global trade facilitation agreement that seeks to reduce red tape, cut costs and improve efficiencies by taking measures such as digitization of procedures etc. Some estimates suggest, the deal could boost global gross domestic product by $1 trillion, increase exports by $570 billion and create 20 million jobs for developing countries.
What about India's food security concerns?
India, represented by Commerce Minister Anand Sharma fought a hard battle, sticking to his guns on a no compromise on food security. Post this deal the WTO’s AoA (Agreement on Agriculture) that seeks to limit market distorting subsidies given to farmers at 10% of total production would not come in the way of India’s domestic food subsidy initiatives. Neither would a 4 year peace clause (which gave interim relief) that India had earlier relented to, but subsequently backed out hold. India must however notify the WTO’s committee on agriculture that it is at risk of breaching the 'di minis' level or the minimum amount of domestic support that can be given by a country to its farmers. Anand Sharma has said there was "imminent danger of breaching the level in the near future".
What's in it for LDCS (Least Developed Countries)?
The package for least developed countries (LDCs) includes allowing their exports easier access to developed country markets through the following means- preferential rules of origin for least-developed countries, operationalization of the waiver concerning preferential treatment to services and service suppliers of LDCs, duty-free and quota-free market access for LDCs. A deal has also been reached on cotton from LDCs with a view to both improving market access for cotton products from least developed countries, and with development assistance for production in those countries.
Who is the man that made this possible?
WTO director-general Roberto Azevedo, who according to the Guardian newspaper shed tears during the summit's closing ceremony as he proposed the vote of thanks, is the man of the moment. Brazilian diplomat Azevedo was elected to succeed Pascal Lamy as Director-General of the World Trade Organization in May 2013 and assumed office barely months ago in September. Azevedo thrashed out the historic deal over 3 months of late night negotiations, managing a feat that had eluded his predecessor Lamy and 4 others right since the inception of the WTO in 1995. Azevedo’s candidature was seen as giving developing nations a voice at the WTO since it was historically always headed by members of the Bretton Woods system. The successful culmination of the Bali round further cements the belief that WTO has finally acknowledged the shifting balance of power.