What's the Big [Trade] Deal? The Significance of the Bali Ministerial for the WTO

WTO_Interior By Caroline M. Kirby

The Ninth Ministerial Conference of the World Trade Organisation (WTO), held in Bali, Indonesia from December 3 – 6, 2013, brought out the best, and worst, in the World Trade Organisation and its 159 [bickering] Member States. While the achievement of an estimated $1 trillion agreement on trade facilitation (TF) is laudable—the first multilateral agreement in the Organisation’s twelve-year history—the slow rate of progress on the rest of the Doha round is lamentable.

Perhaps this lethargy can be explained, if not understood. Inherent in the multilateral trading system are stark differences from bilateral and regional frameworks, to which Member States are still adjusting. In lieu of protecting invested interests, countries must often accept vulnerabilities (i.e. restrictions on agricultural subsidies) for the sake of broad consensus. This lack of comfort and specificity makes multilateral agreements all too unappealing.

In addition, multilateral agreements can result in the exploitation of least developing countries (LDCs), who may defer to their region‘s consensus for political or other reasons. Some argue LDCs would derive more benefits from trade by engaging bilaterally and regionally instead of multilaterally.

Nevertheless, despite these and other recent criticisms of the relevence and effectiveness of the WTO, the institution remains essential to the stability of an increasingly globalized world.

Even considering the short-term economic benefits of bilaterial and regional trade agreements, the comparative advantage remains with the WTO. In the long-term, countries would be forced to expose national sensitivites for the sake of increasing trade partners.

While richer countries can indeed exploit the interests of developing countries, they can also work to protect them. The WTO is the only place where countries can address national sensitivities in a multilateral context.

The Office of the United States Trade Representative (USTR) can lead the effort in the WTO to expand gainful trade opportunities for emerging economies. As Ambassador Michael Froman has said on numerous occasions, for those countries willing to engage in earnest and who see the benefits of trade for themselves, the USTR will work to help them.

Already, USTR has demonstrated an unparalelled commitment to the WTO through its active role in securing consensus in Bali.

Let’s hope the TF deal in Bali is not a one hit wonder for the WTO. With renewed optimism for its mandate, the Organisation and its Member States, spurred on by Azevedo, can realize concrete deliverables throughout the continuation of the Doha round.

Caroline M. Kirby (@carolinemkirby) has interned with both the U.S. Mission to the United Nations and Other International Organizations in Geneva and the United Nations Development Programme in Geneva, Switzerland.

 

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