Meeting the post-Bali challenge

Developing countries made a major concession by accepting the unbalanced Bali package. The challenge now is to ensure that the post-Bali negotiating agenda is informed and defined by the Doha Development Agenda.

Kinda Mohamadieh

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AFTER four days of uninterrupted day-and-night meetings and negotiations in Bali between 3 and 6 December, and the prolongation of the Ninth Ministerial Conference by one day, the World Trade Organisation (WTO) declared that it finally succeeded in sealing a number of decisions. This is the first time that the organisation has actually delivered since it was founded in 1995, according to the WTO's new Brazilian Director-General Roberto Azevedo. The ministerial meeting held in Bali followed two months of uninterrupted negotiations in Geneva.

The so-called Bali package includes 10 decisions on selected matters from the Doha negotiating agenda, which was launched during the Fourth WTO Ministerial Conference in 2001, including: a new trade facilitation agreement, four decisions in the area of agriculture - including one on public stockholding for food security purposes - a decision on cotton, three decisions related to least developed countries, and one regarding a monitoring mechanism on special and differential treatment under WTO agreements.

These decisions had been submitted as draft texts to the Ninth Ministerial Conference by the WTO General Council meeting held on 26 November, in which the general impression was that the Ministerial Conference would not be a negotiating conference. Accordingly, there had been no expectation of a deal in Bali, especially given that most developing countries considered the package as unbalanced and void of a genuine development dimension that addresses the concerns and interests of developing countries.

Although the WTO's Director-General had declared in Geneva that the Bali conference would not be a negotiating conference, in his speech in Bali, Azevedo stated that what was mostly needed was the political will to bridge the gaps on the issues that were not resolved in Geneva, especially those related to agriculture and food security. Therefore, the first two days of the conference were devoted to an intensive negotiation focused on the food security proposal between the United States and India (including direct meetings between both delegations, and others liaised through the Director-General).

Thus, the Ministerial Conference in Bali turned into a series of meetings and small-scale negotiation sessions organised and managed by the WTO's Director-General. The  atmosphere at Bali was mostly tense, with the majority of delegations that were not part of the negotiation sessions having to wait it out. The WTO Director-General called for a series of meetings open to all delegations, and informed them that he would do his utmost to reach an agreement in Bali. Late in the evening of the fourth day of the conference (6 December), Azevedo presented a modified text containing a clean un-bracketed version of the draft decisions reached in Geneva. He gave member countries the choice between accepting the text as it was, or refusing it and bearing the blame for the failure of the Bali conference.

The majority of member countries opted for accepting the text under the pressure of being blamed for the failure of the conference. Nevertheless, Cuba, supported by Bolivia, Venezuela, and Nicaragua, objected to the scheme used to put pressure on members to agree on the Bali package. These countries argued that such approaches were contrary to the principle of participation enshrined in multilateral negotiations. In their interventions, Cuba, Bolivia, Venezuela, and Nicaragua stressed on the importance of participation by all member countries in the negotiations, and refused the Director-General's initiative to put forward his own text regardless of the negotiation process, which must include the participation of all members. They also requested for reinforcement of the non-discrimination principle in all WTO rules and agreements.

Lack of balance and development dimension in the Bali package

The Bali package is unbalanced; decisions related to issues of concern for developing countries, especially the food security proposal and least developed countries' issues, were drafted in legally non-binding wording that does not offer enough guarantees to developing and least developed countries, whereas the trade facilitation agreement was adopted based on binding rules that oblige member countries to comply with practices based on developed countries' experiences and approaches.

It is worth mentioning that developing countries had agreed in 2004 to open negotiations on trade facilitation with the condition that the agreement ensures them the needed flexibilities, taking into consideration their individual level of development and circumstances, and ability to implement new obligations at their own pace and subject to available resources. This included conditioning implementation on acquisition of implementation capacities, through the provision by developed countries of technical and financial assistance to developing countries and least developed countries. This in addition to the principles of self-designation of commitments and self-assessment of capacity to implement by each concerned country.

But, the negotiations that followed  led to the weakening of these notions and principles. In fact, the trade facilitation agreement does not include any obligation for developed countries to provide financial support although this element was deemed essential when the negotiations began in 2004. (It was removed from the body of the agreement, except for a vague, non-binding indication in one of the footnotes.) Thus, developing and least developed countries will find themselves forced to divert limited resources away from essential social objectives, such as spending on healthcare and education, to fulfilling the obligations under the trade facilitation agreement.

As for public stockholding for food security purposes, the decision agreed in Bali consists of an agreement among WTO members to refrain from recourse to the WTO dispute settlement mechanism to challenge other countries adopting such programmes. This is meant to be a temporary solution to be in place until the rules of the WTO's agriculture agreement are permanently reformed, in order to allow member countries to implement programmes in support of their food security policies. India required that any mechanism to be agreed in Bali would remain effective until a permanent solution is reached. In fact, the current rules under the agreement on agriculture do not allow developing countries to have such programmes, as they consider them as interventions that distort the trading system. On the other hand, the rules of the agreement on agriculture allow developed countries to grant domestic agricultural subsidies amounting to more than $400 billion per year without considering such interventions to be  in breach of WTO rules.

It is important to underline that the decision related to food security stems from a proposal made by the G33 developing-country grouping, whose members focus on issues related to the WTO's agreement on agriculture. They wanted to clarify or modify current WTO rules which limit the ability of developing countries to purchase food from small farmers and stock it with the objective of serving food security. These sorts of programmes are adopted by many developing countries. It is important to note that this proposition was part of the revised draft modalities for agriculture negotiations that the WTO members agreed in 2008. However, it was opposed by the United States, the European Union, Pakistan, Uruguay, Thailand, Paraguay and other countries when it was suggested again by the G33.

In the framework of preparations for the Bali Ministerial Conference, Olivier De Schutter, UN Special Rapporteur on the Right to Food, called for granting developing countries the freedom to use food reserves to help secure the right to food without the threat of sanctions as provided for under current WTO rules and its dispute settlement mechanism. In this regard, the Special Rapporteur said that trade rules should respond to the food security policies needed in developing countries instead of forcing states to develop food security policies that comply with WTO rules. He added that supporting local food production is the first milestone towards fulfilling the right to food. Trade should complement and boost local production, not lead to its abandonment.

However, the United States refused to give such comprehensive guarantees to developing countries, and insisted on limiting the decision reached in Bali to existing food stockholding programmes; thus countries setting up such programmes in the future would not be able to benefit from the decision. Furthermore, the notification requirements and procedures demanded of countries attempting to benefit from the decision impose a significant burden on these countries to prove that the adopted programmes 'do not distort trade'.

The post-Bali agenda: the next challenge for the WTO

Developing countries and least developed countries made a major concession by accepting the unbalanced Bali package. The post-Bali negotiating agenda should reaffirm the development dimension of the Doha negotiating round, also known as the Doha Development Agenda (DDA). In Bali, the ministers reaffirmed their 'commitment to the development objectives set out in the Doha Declaration.' They also instructed the WTO Trade Negotiations Committee to prepare a 'clearly defined work plan on the remaining Doha Development Agenda issues' within the coming 12 months, based on the decisions taken at Bali, especially in the fields of agriculture, development, and least developed nations' issues, in addition to all other issues included in the framework of the Doha mandate, and deemed essential to conclude the Doha negotiating round. Defining the post-Bali negotiating agenda is the challenge that WTO members and its new Director-General will have to face in order to restore the development dimension in WTO negotiations.            

Kinda Mohamadieh served as policy adviser and programmes director at the Arab NGO Network for Development (ANND), a regional network with members in 12 Arab countries, where she worked on social and economic rights, trade and investment policies, and other globalisation and governance issues. She is currently based at the South Centre in Geneva where her work focuses on WTO agreements, and investment policies and treaties, with a focus on the Arab region. This article was published in Arabic in Al Hayat newspaper (15 December 2013). The above is a shortened version of a translation which appeared in the ANND Newsletter (December 2013).

*Third World Resurgence No. 281/282, January/February 2014, pp 28-29