 "Ministers have a chance to cross the finish line: Raed Safadi")
If the World Trade Organization (WTO) talks at the Bali ministerial conference fail because of the peace clause, it will be impossible to revive the multilateral trading regime, says Raed Safadi, deputy director (trade and agriculture directorate) of the Organisation for Economic Cooperation and Development (OECD). In an interview with Nayanima Basu on the sidelines of the WTO meet in Bali, he said the absence of a breakthrough will adversely impact the developing nations. Edited excerpts:
What if the Bali talks fail? Chances of a breakthrough appear bleak...
We are almost there. Especially in trade facilitation and agricultural subsidies, we are on the finishing line. What is needed now is political discussion and engagement. In agriculture, it is basically about the peace clause, its duration and period. Everything else on it has already been discussed and achieved. On trade facilitation, be sure it will provide growth and generate jobs as trade costs will come down. Ministers in Bali have a chance to cross the finished line. The stakes are way too high.
I remain cautiously optimistic about a package of agreements coming out of Bali. I picked up some positive language in India's commerce and industry minister Anand Sharma's speech today (Wednesday) where he stated that the peace clause "in its current form" cannot be accepted. Maybe another form? There are wide opportunities for a deal that can be struck somewhere in between a four-year grace period, and a permanent one. Also, when minister Sharma spoke of the trade facilitation agreement, he used the same words , that is, the text "in its current form" cannot be accepted. Well, no one said that the job was done in Geneva and I still think that with some effort, and more flexibility a Bali package is within our reach.
However, some developing countries, including India, have demanded that the peace clause should continue until a permanent solution is achieved, lest they might not even agree to the trade facilitation agreement...
Well, this is also true that a large number of developing countries as well as the least-developed countries want the peace clause the way it is in the present form and they also want the trade facilitation agreement. But all these required a political dialogue. It is a global value chain. You have to be part of the chain. Some think that the peace clause is a good one. Today, goods - from computers to cameras- travel one border several times before reaching the consumer. This leads to cost escalating and wastage of time. Other countries are moving on to trade facilitation on their own to be part and parcel of the global value chain. We are talking about 14-15 per cent reduction in trade costs. That is huge and tantamount to providing a debt-free stimulus package to the world economy.
Are you hopeful of a breakthrough in the talks here?
Negotiations cannot be predicted before the last minute. I do not think all developing countries are not asking the same thing. That is true even for the G33 countries. We need to analyse if the time-bound solution is a good one. The system has to move forward. A permanent solution should be a result of a post-Bali programme. This is a temporary solution. We are throwing out the baby with the bathwater. We need to look beyond Bali. We all need a multilateral system. Developed countries have other forums to push forward their agenda. But it is the developing world that needs the system to run and so it is their responsibility to make this work.
What if the Bali talks fail? Chances of a breakthrough appear bleak...
We are almost there. Especially in trade facilitation and agricultural subsidies, we are on the finishing line. What is needed now is political discussion and engagement. In agriculture, it is basically about the peace clause, its duration and period. Everything else on it has already been discussed and achieved. On trade facilitation, be sure it will provide growth and generate jobs as trade costs will come down. Ministers in Bali have a chance to cross the finished line. The stakes are way too high.
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India has been straightforward in its demand to continue the interim measure, the peace clause, till a permanent solution is achieved...
I remain cautiously optimistic about a package of agreements coming out of Bali. I picked up some positive language in India's commerce and industry minister Anand Sharma's speech today (Wednesday) where he stated that the peace clause "in its current form" cannot be accepted. Maybe another form? There are wide opportunities for a deal that can be struck somewhere in between a four-year grace period, and a permanent one. Also, when minister Sharma spoke of the trade facilitation agreement, he used the same words , that is, the text "in its current form" cannot be accepted. Well, no one said that the job was done in Geneva and I still think that with some effort, and more flexibility a Bali package is within our reach.
However, some developing countries, including India, have demanded that the peace clause should continue until a permanent solution is achieved, lest they might not even agree to the trade facilitation agreement...
Well, this is also true that a large number of developing countries as well as the least-developed countries want the peace clause the way it is in the present form and they also want the trade facilitation agreement. But all these required a political dialogue. It is a global value chain. You have to be part of the chain. Some think that the peace clause is a good one. Today, goods - from computers to cameras- travel one border several times before reaching the consumer. This leads to cost escalating and wastage of time. Other countries are moving on to trade facilitation on their own to be part and parcel of the global value chain. We are talking about 14-15 per cent reduction in trade costs. That is huge and tantamount to providing a debt-free stimulus package to the world economy.
Are you hopeful of a breakthrough in the talks here?
Negotiations cannot be predicted before the last minute. I do not think all developing countries are not asking the same thing. That is true even for the G33 countries. We need to analyse if the time-bound solution is a good one. The system has to move forward. A permanent solution should be a result of a post-Bali programme. This is a temporary solution. We are throwing out the baby with the bathwater. We need to look beyond Bali. We all need a multilateral system. Developed countries have other forums to push forward their agenda. But it is the developing world that needs the system to run and so it is their responsibility to make this work.