A deal to boost global trade by up to US$1 trillion has been approved by the World Trade Organisation’s 159 member economies at a last ditch meeting.
The agreement, the first for the world body in nearly two decades, keeps alive the possibility that a broader agreement to create a level playing field for rich and poor countries can be reached in the future.
“For the first time in our history, the WTO has truly delivered,” said Roberto Azevedo, the director-general of the WTO, during the summit’s closing ceremony yesterday in Bali, Indonesia.
Trade ministers had come to the island resort with little hope that an agreement would be reached after years of inertia in trade negotiations. The global financial crisis in 2008 and the ensuing recession in many European countries reduced the appetite among many developed nations to further open up their borders to imports.
This week’s talks were threatened late Friday when Cuba objected to removal of a reference to the decades-long US trade embargo that Cuba wants lifted.
India had also been an obstacle because of its objections to provisions that might endanger grain subsidies. But in the end, WTO members gave developing nations a temporary dispensation from subsidy limits.
“This week has been about high-level diplomacy, long nights and considerable drama,” said Indonesian trade minister Gita Wirjawan, who led the meeting. “But it has also been about ensuring that the gains of the multilateral trading system reach our small businesses and our most vulnerable economies.”
The centrepiece of the agreement was measures to ease barriers to trade by simplifying customs procedures and making them more transparent.
It is expected to benefit logistic hubs such as the UAE.
The deal could boost global trade by $1 trillion and create as many as 21 million jobs, according to the Peterson Institute for International Economics, a Washington think tank.
It also keeps alive the WTO’s broader Doha Round of trade talks, which begun 12 years ago. This week’s talks were dubbed “Doha lite”.
Mr Azevedo said the WTO will spend the next year developing a fresh approach for moving forward with the Doha negotiations.
The idea behind the WTO is that if all countries play by the same trade rules, then all countries, rich or poor, will benefit.
The WTO was formed in January 1995 after the Uruguay Round trade negotiations spanning 1986-1994 were completed.
* With AP and AFP