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article imageWTO countries reach historic deal to ease trade barriers

By Ken Hanly     Dec 7, 2013 in Business
Bali - At a meeting in Bali, Indonesia, ministers from 159 member countries of the World Trade Organization (WTO) reached a deal that will make it easier to move goods around the world and streamlines customs procedures.
The deal also provides improved duty-free access for items sold by poor countries. Developing nations such as India would be given a greater scope to increase farm subsidies. This type of move is often resisted in the name of free trade but it is politically important in many countries and also can contribute towards food independence rather than dependency upon other countries.
WTO head Roberto Azevedo claimed that this was the first time since its founding in 1995 that the WTO has "truly delivered." Among the problems addressed were customs delays. The African Development Bank points out that it can take three hours just to move goods through customs at the Victoria Falls entry between Zambia and Zimbabwe. Even within countries, there can be barriers to moving goods. In Nigeria there are 69 official checkpoints between the cities of Abuja and Lagos.
There were criticisms by some who campaign for development that the measures did not go far enough. According to them there should have been more emphasis on tariffs and taxes on imported goods. Nick Dearden of the World Development Movement claims: "If the US and EU really wanted to tackle global poverty, they would have made the least-developed-countries package much stronger." The emphasis in the deal was on trade facilitation and such reforms as cutting red tape. While the critics have a point, too much emphasis upon tariffs and taxes could result in no agreement at all as has happened at previous meetings. There are portions of the agreement that make it easier for poorer countries to export their goods by reducing tariffs and also quota limits on some imports.
In spite of limitations to the agreement a Washington think tank estimates that potential gains from the deal would be close to $1 trillion in world trade and 20 million jobs.
A new part of the agreement involves what is termed a "peace clause" in which members agree not to initiate a WTO dispute involving breach of subsidy limits if the breach is part of a food security program. However, this clause will be active only for four years. This clause was also regarded as insufficient by some activists. John Hilary of War on Want in the UK said: "The negotiations have failed to secure permanent protection for countries to safeguard the food rights of their peoples, exposing hundreds of millions to the prospect of hunger and starvation simply in order to satisfy the dogma of free trade."
The deal was almost derailed by Cuba which threatened to veto the package of measures because they did nothing to help remove the US embargo on Cuba. However, Cuba was able to reach a compromise with the US so did not veto the deal.
The deal does not come close to the aim of removing all trade barriers, subsidies, duties and taxes on imports but it is at least a step forward and shows that a significant agreement is still possible. It also restores some credibility to the body which has seen 12 years of mostly fruitless negotiations.
The ninth World Trade Organization  (WTO) Ministerial Conference in Nusa Dua  on the Indonesian reso...
The ninth World Trade Organization (WTO) Ministerial Conference in Nusa Dua, on the Indonesian resort island of Bali
With permission by Reuters / Edgar Su
More about World trade organization, Global trade, WTO trade agreement
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