Hope for a breakthrough at Bali trade talks summit at year-end

PHOTO: Hope for a breakthrough at Bali trade talks summit at year-end

Agricultural liberalisation talks have a high chance of success, a senior Indonesian official said last week, in reference to the 9th WTO Ministerial Conference in Bali, from 3-6 December.

The World Trade Organisation conference will be of crucial importance to Indonesia and the 158 other members of the multilateral trading system, said Iman Pambagyo, director of international trade co-operation at Indonesia's Ministry of Trade.

He was optimistic that the conference would be able to get talks on the multilateral trading system back on track - a step closer to the eventual conclusion of the long-delayed Doha Development Agenda (DAA).

The conference will also provide an opportunity for developing countries to address issues concerning agriculture, trade facilitation and development, Pambagyo said in Jakarta, while addressing a visiting group of civil society and media representatives from East Asian countries. He spoke in Jakarta at a debate on "Current and Future Challenges for the Multilateral Trading System - Perspectives from Asia".

"Trade facilitation should be an element of any package adopted in Bali; reducing red-tape and enhancing customs procedures is critical for businesses to tap into global value chains. This conference has the potential to revitalise global trade," he said.

On development issues, Pambagyo said members should try to assist developing countries - especially least-developed countries (LDCs) - to address the challenges of open trade and effectively implement their WTO commitments.

"Failure should not be an option," he said, adding that if members could agree on an agricultural agenda, it would be a vital step in providing food security and jobs for the rural poor. Pambagyo said other ASEAN members also shared this view with Indonesia.

Meanwhile, Keith Rockwell, director of WTO's information and external relations division, said developing countries were expected to benefit if a deal on farm liberalisation - the most politically sensitive issue for both advanced and emerging market economies - could be signed.

Proposals, including export subsidy cuts, have been circulated among WTO members. For example, the G-20, comprised of developed economies and large-emerging market economies, has proposed that developed countries cut export subsidies by 50 per cent by the end of this year, Rockwell said.

In addition, the G-20, of which Indonesia is also a member, has asked developing countries to cut their subsidies by 25 per cent by the end of 2013. The group has also called for transparency in tariff-rate quota administration.

The G-33, a group of developing countries, has also put forward a proposal on public stockholding for food security and food aid. The group, which includes China and India, has asked for flexibility on rules governing subsidies, on the grounds of food security.

The projection of economic gains from the Bali round is estimated to be in the range of US$40 billion to $2.6 trillion (Bt1.24-80.95 trillion).

The Organisation for Economic Co-operation and Development (OECD) says a 1 per cent cut in trade costs would result in a $40 billion increase in global incomes, 65 per cent of which would go to developing countries.

The World Bank, meanwhile, estimates that improving customs, transport and communications infrastructure to half the equivalent of Singapore infrastructure would lead to a $2.6 trillion gain in global incomes.

The Bali package, however, represents only five to 10 per cent of the Doha round package, said Rockwell. There is also a risk that ministers won't reach any concrete agreement in Bali. The inability to deliver would raise serious questions about the focus of future WTO Ministerial Conferences, Rockwell said.

"Many big players have said failure to deliver in Bali would mean the death of Doha and undermine the credibility of the WTO's negotiating function," he warned.