Discourse: Balance key to Bali trade talks

Linda Yulisman, The Jakarta Post, Surabaya | Headlines | Mon, May 06 2013, 8:31 AM

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Indonesia will host the 9th World Trade Organization (WTO) ministerial conference in Bali, which many members view will be a decisive moment for the world governing body and the Doha development agenda that it endorsed more than a decade ago. The Jakarta Post’s Linda Yulisman talked to WTO deputy director general Alejandro Jara about the preparations for the meeting and also other trade issues on the sidelines of Asia Pacific Economic Cooperation (APEC) trade ministers’ meeting in Surabaya recently. Here are the excerpts:

Question: There are concerns that progress on the draft deal for the Bali meeting has been very slow and Pascal Lamy (WTO director general) recently called for “a change in mindset” for Bali to succeed and also for an acceleration in the negotiations. What are the main sticking points that have hampered the talks so far?

Answer: To prepare for an agreement, you have to first define what it is that you are going to negotiate and make a list of items to put on the table. Then, you have to make proposals and write the texts that are to be negotiated. There’s another phase when you have to decide if you have a divergence of views. This takes time. So just think of how many weeks we have for Bali, not that many, and by now, it should have been clear what is going to be negotiated.

What is clear is that it could be trade facilitation, which is one big item. On the one side there are the legal obligations to trade facilitation. On the other side, there are the capacity building and assistance that developing countries will receive to the extent that they need it to implement obligations. So, there is a balance between one and the other and you have to achieve that balance, and place trust that the assistance will be there. That’s being worked out. It requires custom officials and others. But it also requires a certain time, more political influence and the like.

There are other issues in agriculture and tariff administration that are being worked out. There’s another proposal on the table by the group of G-33, particularly by India, on food security. That’s more controversial. Some countries feel that this proposal is a step back, weakening the discipline we negotiated in the Uruguay Round. That’s the big item on which there are strong views. That’s also holding back everything because what happened with trade facilitation is linked with what is happening here.

Could you elaborate on why the agriculture issue has become controversial?

For Bali, the agriculture issue has several elements. One is food security to the extent that countries are allowed to stockpile and that means subsidizing agriculture, when other countries don’t think they should go in this direction as it could have a weakening effect on them. So that means more clarity, more political understanding. That’s why Pascal Lamy has said “You have to change your mind set. You have to engage more if you want deliverables in Bali to succeed.”

How should this “change of mind set” take place?

First, people have to come round to the thinking that there’s a need for deliverables in Bali. Secondly, you can have deliverables on things where it is possible to reach a consensus. The members must determine this and not continue this game forever. They have to decide the upturn side and whether what is acceptable and non-acceptable are satisfactorily balanced.

So they must focus on issues where most members agree, but pull out of issues where many members cannot agree?

Yes, unless the issue in question is so important for you that you don’t care about the rest.

What are the concrete actions that WTO members should take to progress the talks?

First of all, members are engaging with one another and some members are taking the initiative to arrange meetings with senior officials to discuss things on a higher political level, but we have to work faster.

What are the chances of trade facilitation, agriculture and LDC packages serving as early harvests for the Bali meeting?

So far, these areas are issues that many members think have a good chance of being delivered in Bali. But there’s one area, agriculture, which is more controversial. A controversial area in agriculture is stockpiling.

In its outlook on global trade released recently, the WTO said world trade will remain low, growing at 3.3 percent this year, with the risk of protectionism remains. What can the WTO do to reduce or avert continuing protectionism?

The members must apply measures. On the one hand, they have to engage with one another and they have to say: “I don’t like the measure you’re applying and we will challenge it to dispute settlement,” if they consider it legal. Then settle with members in terms of how they are impacted by the measure.

On the other hand, the secretariat collects measures. We put it in black and white. We report every six months, detailing our measures that have been applied — restrictive measures as well as trade liberalization measures — so that members are aware of what’s happening. We provide information and analysis, but it’s up to the members to react to the measures that affect them negatively.

When global trade returns to a normal level, will the risks of protectionism decline?

I think that with economic recovery and more jobs, there will be less fear that jobs will be lost, and more acceptance of the fact that there is more competition. I expect governments will be less pressured to apply restrictions.

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