The 13th WTO summit, Nusa dua Bali

Nusa Dua, Bali. December 3 - 7, 2013 

A deal to boost global trade has been approved by the World Trade Organization's 159 member economies for the first time in nearly two decades.

WTO Director-General Roberto Azevedo shed tears during the summit's closing ceremony Saturday as he thanked host nation Indonesia and his wife, saying "for the first time in history, the WTO has finally delivered" on large scale negotiations.

 

It was the first decision on global commerce reached by the WTO since its establishment in 1995 and will shape the international trading regime. Most importantly, it will revive the development mandate that the WTO ministers agreed during their meeting in Doha, Qatar, in 2001 — to open more markets and opportunities for developing and least-developed countries.

      For Indonesia, the agreement gives a massive boost to the country’s foreign policy approach, famous for its “thousand friends, zero enemy” slogan. Before and during the meeting, Indonesian officials said that their role as the meeting chair would be as honest brokers.

The tradition of serving as facilitators goes back to 1991, when Ali Alatas, then the foreign minister, helped broker a deal that led to the Cambodia Peace Accord. Last year, Foreign Minister Marty Natalegawa put his own diplomatic mettle to the test when he shuttled across the region to save the Association of Southeast Asian Nations from its first failure to agree on a joint statement at the Asean leaders’ summit.
But foreign policy analysts contend that the time is right for Southeast Asia’s largest economy to become more assertive on international stage.
By stating that the country is an honest broker, Jakarta is limiting the sphere within which it can push for its national interests, critics say.
“In this highly competitive nature of international politics, you can’t always be in the middle of everything and try to please everyone,” said Aleksius Jemadu, dean of Pelita Harapan’s School of Social and Political Studies.
“The action from India is laudable. They know what they want and pursue it rigorously,” he said, referring to India’s insistence on pursuing food subsidy policies that threatened to derail the WTO talks.

Being assertive
Yulius Purwadi, a lecturer at Parahyangan Catholic University’s School of Social and Political Studies, said that as the host and chair of the WTO meeting, Indonesia played a strategic role.
Indonesia, he says, is often viewed at international forums as “punching below its weight,” and should strive to do more.
“We must be more assertive. We are an emerging economy with 250 million people, we carry a lot of weight in international politics,” he said.
Indeed, the Bali Package — which is composed of 10 points, including potential agreements on trade facilitation, resolving agricultural disputes, and discussions on issues affecting least-developed countries — serves Indonesia’s national interest.
The agreement on agriculture, which was one of the major issues holding back a deal among the WTO’s 159 members, will provide Indonesia with more policy space to expand its food security program.
For instance, a deal on cotton, proposed by cotton-producing countries in Africa, could help to support Indonesia’s textile industry, which has made a comeback after being seen to be in its “sunset” phase.
And under the terms of the WTO’s farm agreement, developing nations will be allowed to subsidize their crops in order to maintain their food security as long as these programs do not distort trade or adversely affect the food security of other members.
The interim solution will last until the 11th Ministerial Conference, which would be four years from now, and it will report on the progress of the program in the next meeting. The WTO holds its ministerial meetings every two years.
India last week opposed any measure that would negatively affect its food security, and had opposed an interim solution. The nation recently passed a subsidized food program to support farmers and to ensure there was enough food available domestically.
“Since the establishment [of the WTO], this is the first ministerial [conference] which has come out with a very robust and balanced outcome, which reinforces the centrality of the WTO in the rule-based multilateral system,” Indian Commerce and Industry Minister Anand Sharma told reporters after the closing ceremony of the talks in Nusa Dua, Bali, on Saturday.
He said he was happy with the interim plan until the WTO comes up with a permanent solution.

Defining character
The WTO has a tradition of allowing its members to define themselves. South Korea still considers itself a developing country at the WTO forum, even though its economic status with a large per capita income shows otherwise.
Elsewhere in the Bali Package as a means to support least-developed countries, a developing nation will be asked to determine by itself on how much of the domestic market will be open to goods and services from developing countries.
The agreement on trade facilitation cluster in the package will inject as much as $1 trillion into the world economy per year by reducing costs of trade. At the same time, least-developed countries will allow poor countries to benefit more from the multilateral trading system by exporting more of their goods.
Indonesia must also notify the WTO on how it will comply with the trade facilitation agreement, which is broken down into three categories: agree to implement by as late as next year; determine its own date without assistance; determine its own date but with assistance.
Indonesia must tread carefully within the context of these terms of the agreement, warned Jemadu, pointing out that Indonesia often stood on the losing side when it came to agreement in opening up its market.
“I fear that it would be ACFTA all over again,” he said, referring to the Asean-China Free Trade Agreement that went into full force in 2009.
In that first year of full implementation, Indonesia’s trade deficit with China widened to $4.7 billion from $2.5 billion.
Deputy Trade Minister Bayu Khrisnamurti said Indonesia believed the WTO was a fair institution for all members.
“What happened is that the developed countries are better in articulating their interests, so it appears that the WTO benefits them the most,” he said.
But the international landscape has tilted in the direction of developing countries, Bayu said. “Therefore, we [developing countries] must become more explicit in pursuing our interests,” he said.

‘Tireless support’
Saturday’s closing ceremony was welcomed and cheered by all members of the WTO, despite objections by Cuba, Nicaragua, Venezuela and Bolivia, which voiced their concerns regarding trade embargoes on goods in transit.
Reservations by these countries resulted in a meeting with all of the heads of delegations that lasted until 5 a.m. on Saturday.
India’s Sharma admitted that he was in consultation with Roberto Azevedo, the WTO director general, and Indonesian Trade Minister Gita Wirjawan. A high-level diplomat, who declined to be identified, said Sharma met with Gita, Azevedo and US Trade Representative Michael Froman in a two-hour discussion that started at 2 a.m. on Friday.
Azevedo complemented Gita “for his able chairmanship, and for his tireless support, political acumen, and dedication to the task throughout this process.”
Despite being deprived of rest in talks that lasted since Friday, Gita looked ecstatic when making the announcement of the historic deal. So, too, did Avezedo, who had been said to have shed a tear.
“You have been critical to the success of this conference and this [Bali] package,” Azevedo told Gita in his closing remarks.
“I’m delighted to say for the first time in our history, the WTO has truly delivered.”