WTO reaches 'historic' trade deal in Bali

Agreement approved by ministers seeks to lower trade barriers but critics fear hit to jobs

World Trade Organization Director General Roberto Azevedo at the WTO conference in Bali on Saturday.
Sonny Tumbelaka/AFP/Getty

Commerce ministers from around the world approved a World Trade Organization agreement Saturday to lower trade barriers by making it easier to move goods around the world and improving customs procedures. Members hailed the deal as a "historic" boost for the international body.

The accord reached on the Indonesian island of Bali marks the first global agreement struck by the Geneva-based body since its 1995 founding.

The deal falls far short of WTO's vision of dismantling global trade barriers through the 12-year-old Doha Round of talks, but it is seen as an important step in that direction.

"For the first time in our history, the WTO has truly delivered," Roberto Azevedo, WTO director-general, said at the closing ceremony. "We're back in business. ... Bali is just the beginning."

Al Jazeera's Step Vaessen, reporting from Jakarta, said reaching the agreement was "very difficult."

She said India resisted part of the deal covering agriculture, and Cuba walked away from the meeting at the last minute.

"But everything came together at the last minute, and it is now a historic deal. It was a very, very tough negotiation."

The pact includes commitments to facilitate trade by simplifying customs procedures.

The Washington-based Peterson Institute for International Economics estimated in a report this year the customs measures could create $1 trillion in economic activity and 21 million jobs if properly implemented (PDF).

WTO officials have conceded, however, that uncertainty surrounds how effectively the measures will be implemented, especially in less developed countries.

Days of haggling

The agreement was reached after more than four days of haggling in Bali that stretched past the conference's Friday deadline.

Azevedo said it had important symbolic value for Doha.

"The decisions we have taken here are an important stepping-stone toward the completion of the Doha Round," he said, adding the WTO would soon get to work on a "road map" for reviving Doha.

The Doha Round aims to remove hurdles to commerce and establish a globally binding framework of trade rules fair to both rich and poor countries.

But protectionist disputes among the WTO's 159 members have so far foiled any grand agreement.

Azevedo has expressed concern over the rise of alternative regional trading pacts that he fears could render the WTO obsolete if the Geneva-based body did not start clinching major worldwide agreements.

The Bali negotiations teetered repeatedly on the brink of collapse due to various differences.

India, which wants to stockpile and subsidize grain for its millions living in poverty, demanded that such stockpiling measures be granted indefinite exemption from WTO challenge.

The U.S., which implements large farm supports of its own, said, along with others, that India's grain policy could violate WTO limits on subsidies.

A later hurdle emerged as four Latin American countries objected to the removal of a reference to the U.S. embargo on Cuba in the accord's text. 

Compromise wording smoothed over those hurdles.

Fears for jobs

But for all the compromises made, critics still said the sudden reduction of import taxes for the poorest countries — a key part of the deal — could wipe out industries, causing job losses in both rich and poor countries, according to Al Jazeera's Vaessen.

The agreement will come as a major personal victory for the Brazilian Azevedo, who took the organization's helm in September and injected a sense of urgency into the talks.

"With this landmark accord on trade facilitation and other issues, the WTO has re-established its credibility as an indispensable forum for trade negotiations," the U.S. Chamber of Commerce said.

The package also included pledges to limit agricultural subsidies and policies to aid least-developed countries.

As the Doha Round has faltered, alternative regional pacts have emerged between major trading nations, such as the 12-country Trans-Pacific Partnership (TPP) spearheaded by the U.S.

TPP negotiators are holding their latest meeting in Singapore on Saturday as they work to figure out the outlines of that trade alliance.

Azevedo has said such alliances could have "tragic" consequences on poor nations by denying them a place at the trade-rules table.

Al Jazeera and wire services

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