The Bali package and fair trade for all Gita Irawan Wirjawan  ;   Former trade minister

JAKARTA POST, 09 April 2014

                                      

                                                                                         

                                                             

On Dec. 7, 2013 a sense of euphoria swept through a Balinese conference room filled with ministers from around the world. After days of intense negotiations, often running through the night, members of the World Trade Organization (WTO) finally agreed to a range of new measures to improve global trade, known as the “Bali package”. As chair of the ninth WTO Ministerial Conference (MC9), I was privileged to have played a small part in its success. Success was never guaranteed. Negotiators at the WTO in Geneva, who had been trying to shape the Bali package for over a year, worked long hours to broker compromises. They came tantalizingly close to a deal, but fell just short in the days leading up to the MC9. So it fell to ministers to make the tough decisions at the MC9 to salvage the Bali package. Indonesia played a critical role in this process. From the World Economic Forum in January to the APEC Leaders Meeting in October 2013, Indonesia constantly looked for opportunities to engage with fellow members and influential business leaders to instill a sense of urgency over the need to conclude the Bali package. Not to mention countless trips to Geneva, dozens of bilateral meetings and a string of outreach activities in the days leading up to and during the MC9. Even President Susilo Bambang Yudhoyono actively lobbied world leaders and urged all sides to make the necessary compromises to ensure the Bali package could be delivered. Why is the Bali package so important? Indonesia wanted the Bali package to succeed not only because it hosted the MC9, but more importantly because Indonesia places great stock in the WTO as the only rule-making forum that gives an equal voice to all countries at the table. Whatever we do in the WTO has to benefit us all. The Bali package focused on three small but significant components of the broader Doha Agenda — an agreement on trade facilitation; measures that go some way to making agricultural trade fairer; and special preferences for least developed countries to help them benefit more from the global trading system. Indonesia, like other developing countries, should benefit from the trade facilitation agreement because it will cut red tape and smooth the way for our exports to other countries. It also allows developing countries to identify and receive assistance in areas where our own systems may need improvement. Study by the Organization for Economic Cooperation and Development (OECD) suggests that a 1 percent reduction in the global costs of trading could boost the world economy by US$40 billion, and two-third of this benefit would flow to developing countries. Agricultural trade is often seen as a battle between the United States and the European Union, but we should never forget that agriculture is the economic mainstay of many developing countries. Our farmers are not landed gentry. They toil hard yet still struggle to make a meager living. We must do everything we can to support them. There are many loopholes in the Domestic Support section of the WTO Agreement on Agriculture, notably the external reference price to calculate the level of domestic support. As it stands, the reference price is based on the average price between 1986 and 1988 — something that many developing countries find totally unrealistic. For this, we are pleased the Bali package does this by providing scope for Indonesia and other developing countries to support farmers and poor people through food security and public stockholding programs. The Bali package also has specific benefits for the world’s poorest. Least developed countries will gain special treatment through the granting of duty-free, quota-free market access and preferential access to the service sectors of developed countries. These are important steps in bringing the benefits of trade to those most in need. After Bali? The MC9 has been considered as a stepping stone toward the completion of the long over-due Doha negotiations. Understandably, some members appear quite enthusiastic to start discussing the rest of the Doha Agenda or introduce new issues after Bali. There is a lot of unfinished business from the Doha Development Agenda, and the Bali package represents less than 10 percent of the overall Doha agenda. However, we should remember that the outcomes in Bali were made possible only because there was confidence among the majority of WTO members that the package reflected a truly fair outcome, especially in the eyes of developing and least-developed countries. The Bali package proved that all 159 members of the WTO are capable of coming together to reach an agreement. It could be done because members adopted an inclusive and balanced approach to the negotiations, and we should maintain such an approach to prove that the Bali package works. Therefore, members should focus on operationalizing the package by the WTO General Council’s meeting in July. Otherwise, a larger interest will be at stake and the Bali momentum will cease. ●