No movement in WTO's Bali package worries India

Agreement 'endorsed' by members and being legally vetted but will be part of the main Doha agenda only after a tenuous process

After the euphoria over an "Indian victory" at the ninth ministerial meeting of the World Trade Organization (WTO) in Bali, Indonesia, not much has moved on the agreed agenda.

The 159 members of the WTO managed to adopt the 'Bali package' after last December's meeting, the global trade body's first pact to be approved by all its members.

"There is no movement on the main issues, such as trade facilitation, food stockholding, export subsidies and a package for LDCs (least-developed countries)… The binding commitments have not been forthcoming, no discussion is happening at all. It is a concern," a senior commerce department official who did not want to be named told Business Standard.

In Bali, ministers endorsed the Trade Facilitation Agreement aimed at making Customs procedures more trade-friendly and lowering transaction costs. More importantly, the US and European Union (EU) and the developing countries signed several agreements on agriculture, an issue that has deeply divided them on matters like market access and subsidies.

A package for LDCs was also agreed upon to help them improve their market access opportunities.

The agreement arrived at in Bali was only "endorsed" by all the member countries. It has to now be legally vetted and, following a tenuous process, has to be inducted in the main Doha agenda. All that was agreed upon would come into force after all the members issued notifications, the official said.

"The Bali Ministerial endorsed a draft agreement, so a legal vetting of the agreement is still under way in Geneva. The agreement will be effective once the protocol is negotiated," Commerce Secretary Rajeev Kher said recently while addressing the Federation of Indian Chambers of Commerce and Industry.

The Trade Facilitation Agreement, which seeks to ease Customs regulations on international borders and which is expected to induce $1 trillion into the global economy, has to be finalised by July 31, but there has been no progress in developing countries, including India, on how to implement the rules.

The Trade Facilitation Agreement was crucial for India as exports and imports contributed 40 per cent to the country's gross domestic product, Kher said.

In January, a Preparatory Committee within the WTO secretariat in Geneva was constituted to ensure early enforcement of the agreement, prepare for its efficient operation, conduct its legal review, and receive notifications of members' commitments. But there had been no progress on the committee's work, officials said.

"It should be recognised that the Bali deal was merely temporary succour. The challenge for WTO members is two-fold. One, they will have to move the Bali decisions towards implementation and two, they will have to provide momentum to the contentious areas of the Doha mandate," said Biswajit Dhar, director-general, Research and Information System for Developing Countries, a think-tank. In agriculture, though India was able to secure temporary relief in continuing food subsidies that are not allowed by WTO, it committed itself to seeking a permanent solution along with other developing countries. There has been no movement on that as well.

STICKY PATCH

• No movement in the Bali package
• Trade Facilitation Agreement undergoing legal vetting
• Export subsidies under agriculture not even discussed since December
• LDC Package has not received any binding commitment by member countries
• Countries have not yet issued notifications