The World Trade Organisation’s first large-scale agreement saw 159 ministers from around the world reach a precursory deal to boost global trade.
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The meeting in Bali, Indonesia, involved an effort to simplify doing business internationally, improved duty-free access for goods and increased farm subsidiaries for the less developed economies.
“For the first time in our history, the WTO has truly delivered,” said its chief Roberto Azevedo.
As the organisation’s first such agreement since its creation in 1995, UK Prime Minister David Cameron has called it both a “historic” agreement and a potential “lifeline” for the world’s poorest people.
He also stated his estimates it will benefit British businesses by around GBP 600 million.
Internationally, an influential American think tank has claimed the potential gains could be as high as USD 1 trillion for the global economy.
However, the agreement was criticised by campaigners, who claimed it was not doing enough for the world’s poor.
Tariffs or taxes on imported goods, usually the “bread and butter” of trade rounds, were not covered in the agreement.
Instead, it focused on trade facilitation; reducing the red tape and bureaucracy which produces much of the costs and delays within international trade.
Another aspect deals with the development of poor countries’ economies – easing sanctions on tariffs and quota limits on imports to allow them to sell their goods more easily.
Yet campaigners claim the Bali package is not doing enough, with the World Development Movement’s Nick Dearden stating “If the US and EU really wanted to tackle global poverty, they would have made the least developed countries’ package much stronger.”
Litmus test for credibility
The road leading up to this development has been especially hard, with some members publically stating (albeit behind anonymity) that they did not believe an agreement could be reached.
Previous repeated delays have also made the WTO seem irrelevant.
The Bali meeting was therefore an important moment in the WTO’s quest for credibility, and will help repair its image.
However the plans inbuilt flexibility on farm subsidiaries – a development led by India and its insistence to heavily subsidise grain – led to the inclusion of a “peace clause,” whereby members cannot initiate disputes over subsidiary limits when part of a nation’s food security programme.
But this clause only lasts for four years, and had prompted criticism from campaigners who believe the agreement does not secure the food rights of the people.
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