Bali offered little for developing nations

Euphoria over recently concluded Bali ministerial is unnecessarily overwhelming. What Bali produced is a trade deal that was never on the immediate agenda of WTO negotiations. The so-called deal of trade facilitation agreement (TFA) signed by 159 WTO members is more of a sign of victory for industrialised countries rather than for developing countries. It basically points to re-affirmation of industrialised countries’ earlier position which took off in Singapore ministerial way back in 1996. 

The issue which remained dormant for nearly 17 years bounced back to take the central position at Bali’s ministerial. No one in today’s world can deny the necessity and urgency of a deal like trade facilitation.  But the question is, whether such a deal will be beneficial for 159 members with immediate effect that  you clinched a deal of such nature without striking a deal which was most essential in relation to  agriculture and around which Doha negotiations have been intensively negotiated for 12 years.

Even if the deal on trade facilitation was signed, will the results for poor and marginal countries be realized? It is simply difficult to realize, because the activities, practices and formalities that follow in implementing such a system require huge financial resources, large technical assistance and immense capacity building, for which many member countries especially developing and LDCs are either not ready or not at all equipped.

Productive capacity

Under such critical situation where two-third of the WTO members are from developing and LDCs background and having no significant expertise, skills or institutional linkages to facilitate trade, are they going to benefit from this deal? Most of the LDCs are in the African region and they have no  productive capacity or market access to most of the world market, how are they going to integrate  with the world economy and hence benefit from such trade facilitation deal. These countries’ share  of world trade is miniscule hovering around 1.12 per cent.

What perhaps would have been a more comfortable position for developing and LDCs is to settle the issue on agriculture, mainly relating to domestic subsidy and export competition, which are the real culprits and creating too much of distortions in world market. Developed countries’ provision of subsidy is being in the negotiating table since Uruguay Round and yet such asymmetrical programmes of subsidies are prevailing in a confused and non-transparent way.Allowing developing countries to have interim cushion relating to their subsidies and government  procurement may have been a good beginning, but as many developing countries like India which predominantly depends on agricultural sector will have some hiccups as the years go by. There could be legal action against India if it breaches subsidy cap of agricultural production of 10 percent which has been kept at 5 percent for developed countries. Food security to all will depend on this.

One caveat for the interim relief is that it is only valid for public stock holding programmes for food security purposes not for any other purposes where the demand goes up. It would suggest that in a country like India if the centre or a State wishes to widen its procurement drive by including more crops, it would be devoid of that protective net. 

The agreement further advises protection against legal action for breaching subsidy limits would be given only if the stocks procured under such programmes do not distort trade or adversely affect the food security of other members.

The other significant development relating to food security is that the agreement relating to minimum support mechanism which becomes key to survival of farmers. One can provide such measures but it is open to interpretation to establish that distortion in agriculture has not taken place, so that India doesn’t have to face the brunt of legal complication in dispute settlement mechanism. 

Now all these new dynamics demand a huge database of information which needs to highlight food security and procurement details happening at centre and state levels and submitted to WTO. This agreement in essence has suggested that developing country need to work physically harder to get its due share under WTO framework. India and many other developing countries may have rejoiced in current Bali negotiations, but what they have not understood is developed and industrialised countries are so well versed with modern artistry and skills that they may turn and twist agreements to their advantage just as they clinched trade facilitation deal to their big advantage unlike proving a clear-cut development deal for developing countries and India.

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