'Morning of the World' awaited at Bali

President of Indonesia, Susilo Bambang Yudhoyonoamidst, formally inaugurated the Bali Ministerial Meeting of the World Trade Organization (WTO) on Tuesday in grand style. The setting was good but the outcome of the four-day meeting remains clouded in uncertainty.

As of now, all countries are sticking to the stated positions, while bilateral deliberations have begun with the hope that countries will show flexibility. The Director-General (DG) of WTO, Roberto Azevêdo, is expected to be sharing a draft negotiating text on his own responsibility, which is likely to provide some meat for countries to deliberate on. However, it is not yet clear if the text would allow countries like India to get enough time under the Peace Clause to renegotiate the Agreement on Agriculture to continue providing subsidies to cover food security concerns. The DG's text is normally issued at ministerial meetings when countries feel that negotiations have hit a wall and stand a good chance of being rejected by countries, if they are not taken into confidence before the text is issued.

On the other two issues, of trade facilitation and development, countries seem to be moving towards a consensus and not many differences exist. The other two issues on agriculture would be export competition and better management of tariff rate quotas where consensus is likely to be formalised over the next two days.

Interestingly, the director-general of WTO held an informal meeting with about 40 "friends of WTO" countries, which,as one of participants said, are countries that "want the ministerial to succeed". This was the first such meeting by a WTO DG at the start of a ministerial meeting. Two days back, about 100 countries also sent a letter to the WTO DG, saying they would support the agenda that is on the table for the ministerial.

The question now that everybody seem to be asking is whether India would agree to dilute its stand that it has adopted on the issue of food security as "everyone, especially the US, have already pushed themselves to the maximum". Therefore, when the President of Indonesia sought flexibility by member countries, some of the Indian industry participants in Bali were left wondering if he was only referring to India or also other countries that are also expected to show the same amount of flexibility if the ministerial is successful.

Many international observers also were of the view that if India does not accept the four-year Peace Clause on food security and if the ministerial fails on that account, New Delhi would open itself to possible disputes by trade partners immediately if it crosses the acceptable subsidy threshold of 10 per cent of GDP.

The next two days will be crucial. Intense bilateral meetings are expected to help in moving the process further.

All countries, including India, are clear that the Bali ministerial is critical to the future of the multilateral agenda. However, the cost of success, it was felt, should not be high for India.

The Indonesian President said the island of Bali had till date been lucky for multilateral negotiations. Two earlier multilateral negotiations - the ASEAN leaders summit in 2003 and the Climate Change discussion in 2007 - had succeeded and so there was a strong possibility that the WTO ministerial will also succeed. Bali, as Azevêdo pointed out, is also called the "morning of the World". He hoped that Bali would help make it "morning of the WTO".

The writer is principal advisor, APJ-SLG Law Offices