The World Trade Organisation reached its first ever trade reform deal yesterday to the roar of approval from nearly 160 ministers who had gathered on the Indonesian island of Bali to decide on the make-or-break agreement that could add $1 trillion to the global economy
The approval came after Cuba dropped a last-gasp threat to veto the package of measures.
“For the first time in our history, the WTO has truly delivered,” WTO chief Roberto Azevedo told exhausted ministers after the talks which had dragged into an extra day on the tropical resort island.
We have put the ‘world’ back in WTO
“This time the entire membership came together. We have put the ‘world’ back in World Trade Organisation,” he said. “We’re back in business... Bali is just the beginning.”
The talks, which had opened on Tuesday, nearly came unstuck at the last minute when Cuba suddenly refused to accept a deal that would not help pry open the US embargo of the Caribbean island, forcing negotiations to drag into yesterday morning.
Cuba later agreed on a compromise with the US. But there was scepticism how much had really been achieved.
“Beyond papering over a serious dispute on food security, precious little was progress was made at Bali,” said Simon Evenett, professor of international trade at the University of St Gallen in Switzerland.
“Dealing with the fracas on food security sucked the oxygen out of the rest of the talks.”
The talks had begun under a cloud because of an insistence by India at the outset that it would only back an agreement if there was a compromise on food subsidies because of its massive programme for stockpiling food to feed its poor.
India, which will holds elections next year, won plaudits at home for taking a stand on behalf of the world’s poor. An eventual compromise was greeted with jubilation by Trade Minister Anand Sharma.
While India had insisted on a permanent exemption from the WTO rules, the final text aimed to recommend a permanent solution within four years. But the agreement is a milestone for the 159 WTO members, marking the organisation’s first global trade agreement.
It also rescues the WTO from the brink of failure and will rekindle confidence in its ability to lower barriers to trade worldwide.
The deal would lower trade barriers and speed up the passage of goods through customs. Analysts estimate that over time it could boost the world economy by hundreds of billions of dollars and create more than 20 million jobs, mostly in developing countries.