After 12 long years of nothing, even the most committed backers of the World Trade Organization’s Doha Round had reached the point of despairing that these negotiations could achieve anything, ever. And then this: A surprise trade agreement was reached this weekend in Bali. It’s unglamorous, and largely concerned with streamlining mundane processes that can impede goods crossing borders. But it’s a start.
The deal does not reverse the worrying trend of competing regional trading blocs such as NAFTA, the European Union and the prospective Trans-Pacific Partnership. But it shows that global agreements on global trade rules are still possible. This deal focuses on something small but significant: what the WTO calls “trade facilitation.”
In an age of global supply chains, exporters and importers need clarity and speed. They need to know in advance what papers must be filled out, and their lives will be made easier by standardization and harmonization of procedures. More particularly, the movement of perishable goods can be frustrated entirely, if customs officials do not give them priority. The deal is also supposed to smooth the passage of goods in transit, passing through countries. No wonder that shippers such as United Parcel Service and FedEx are happy.
The agreement isn’t the big, all-encompassing breakthrough that had once been aimed for. On the key matter of removing export subsidies, the deal does little more than call for disclosure and transparency – though that is something, since once subsidies are publicly known, there is a better chance of one day eliminating them.
Agricultural protectionism has hardly been touched; if anything, the acceptance of some countries’ buildup of large stocks of agricultural goods has been granted approval as a matter of food security, though the true motive may be subsidizing farmers, who are often an effective voting bloc.
Throughout the Doha Round, the WTO has continued to serve its essential purpose in upholding existing trade rules. But with 159 members, it’s a challenging forum for negotiating new trade rules. Challenging, but as this weekend’s results show, not impossible.