Making the Bali deal – What’s behind it?

BALI, Indonesia  – When estimates of possible economic benefits from last week’s World Trade Organization Bali deal range from several hundred billion dollars to a trillion, you know it is not an exact science. For agriculture, it was dubbed a “limited package” and in the context of the broader Doha Round WTO dreams for agriculture, that is true. Still, it was a significant accomplishment after 12 years of WTO failure to complete a deal. An interesting underpinning of the story is why trade and agriculture ministers were able to seal a deal in Bali that had eluded their predecessors for a dozen years. Since the 2001negotiating round was launched ministerial meetings in Geneva and Hong Kong produced little but wishful thinking. In 2005 in Hong Kong, ministers agreed to end agricultural export subsidies by 2013. Wait, that’s now. Has there been an end to export subsidies? Nope. The reason is that the important commitment made by ministers could only be implemented when the rest of the expansive Doha Round agenda was implemented. “Nothing is agreed until everything is agreed” has been the WTO mantra. Reason number one for the Bali success was a change to the all-or-nothing rule. Instead, it presented delegates with a bite-sized package of what are referred to as “low-hanging fruit” – benign proposals like less import obstruction at borders, a notional agreement to end export subsidies, an endorsement of rules for food security programs and a more sensible regime for managing import commitments under tariff rate quota trade agreements. Who could object? Well, on different items many did but in the end, the small package could be managed. WTO director general Roberto Azevedo sensibly said Dec. 7 that making a package smaller does not necessarily make it more acceptable to members. Still, it is impossible to argue that agreeing to one proposition that only comes true if various other propositions are accepted by others — say a return flight from Winnipeg to Regina that only is valid if an Alaskan cruise also is endorsed sometime in the future and by other people — is a hard sell. So veering for the first time from “nothing is agreed until everything is agreed” rule was key to the progress, although that rule applied to the elements of the so-called Bali package. The other reason is the changed style that new WTO director-general Azevedo brought to the discussion. The veteran Brazilian trade negotiator is a conciliator and a listener who heard people out during the intense week and then convinced them to ‘buy in’ to solutions. His style is in sharp contrast to the imperial “I know better” approach of his unsuccessful predecessor Pascal Lamy who presided over the WTO for a decade but scored no negotiating successes. Azevedo’s performance since he took the reins in Geneva earlier this year illustrates that skilful leadership is a key to organizational success. At the closing news conference for the WTO Bali meeting Dec. 7, Indonesian trade minister and conference chair Gita Wirjawan said he thought the progress would be because of the soothing “Bali effect” on delegates. “It’s not the Bali effect,” he said. “It is the Azevedo effect. He shows faith and patience.” So chalk up the Bali success in good part to a manageable stand-alone agenda and a skilful leader. Related stories: WTO deal reached Consensus among WTO membership unlikely, even with help from above International food trade rules unlikely to change at WTO meeting WTO progress on agriculture ‘easily solvable’

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