WTO: Nothing much for Singapore?

The 160-member World Trade Organisation (WTO) reached its first ever worldwide trade reform deal at its 9th ministerial conference in Bali, Indonesia, on December 7. But what's there in it for Singapore is not clear, especially since the country is already negotiating Trans-Pacific Partnership (TPP) deal with 11 other nations. 

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“For the first time in our history: the WTO has truly delivered,” said WTO Director-General Roberto Azevêdo. “I challenged you all, here in Bali, to show the political will we needed to take us across the finish line. You did that. And I thank you for it.”

Contrarily, critics are calling the agreement a “failure” with regards to poverty reduction, hunger alleviation and environment protection.  

The WTO was formed in 1995, after almost a-decade-long Uruguay round trade negotiations, were completed. The Organisation's Doha round of trade talks have been pending since 2001. It was aimed at removing trade hurdles across national boundaries and establish a globally binding framework of rules. But protectionist policies and disputes arising out of it, among WTO members, have foiled the Doha negotiations. Till the Bali Package that is. 

Nick Dearden, director of the World Development Movement (WDM), in his article 'Hypocrisy, blackmail and power politics: same old WTO', details the hypocrisy in WTO's negotiations.

“The centrepiece of the summit was the battle between the US and India. India’s widely supported position was that it be allowed to buy and distribute food to the poor, outside of free-market mechanisms. The US and EU blocked it, despite their own subsidy programmes. US subsidies are enormous and do effect international trade, unlike India’s. What’s more, on two other packages, including trade in cotton, rich countries blocked free-trade solutions that would have been beneficial for developing countries. Such hypocrisy is actually built into trade rules, where rich countries have negotiated to be allowed to keep high levels of subsidies simply by stating they don’t distort trade, and by having had higher subsidies to begin with.”

At Bali, the contention was on “peace clause”. Developed countries such as the US and the EU wanted developing nations to accept a peace clause, which offered only four years of immunity from penalties imposed for breaching the agricultural subsidy cap of 10 percent under the Agreement on Agriculture. Meanwhile, developing nations led by India, wanted this clause to be in place until a permanent solution for smooth implementation of their respective food security programmes is found. Ultimately, the developing countries prevailed.

But critics have cautioned against premature celebrations.

Romain Benicchio, Senior Policy Advisor with Oxfam - an international confederation of 17 organizations in more than 90 countries to build a future free from the injustice of poverty – noted, “The Bali package is hardly going to make a difference for poor countries but at least it keeps the negotiations on food security alive. However a peace clause can’t be the end of the story and negotiators now have to find a long term solution to change the rigged rules that stand in the way of developing countries food security policies. The agreement is certainly no game changer for the poor, its gains have been grossly overestimated, while the costs of implementation for poorer countries were completely ignored.”

Jon Queally, senior editor at Common Dreams, a US-based non-profit independent news-centre, argued, “It is unfortunate that some countries will leave Bali with a vain hope that further negotiations will conclude the WTO’s so-called development agenda over the next year. The reality is rich countries like Canada, the United States and Europe have abandoned the idea completely and are focused on moving their corporate agenda as far as it can go in transatlantic and transpacific free trade deals, as well as a highly secretive international services agreement being negotiated on the outskirts of the WTO in Geneva by a small cabal of developed countries.

Queally was hinting towards deals such as Trans-Pacific Partnership (TPP) being negotiated between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. [Click here to read Newzzit's earlier story on Trans-Pacific Partnership (TPP)]

Azevêdo himself, who took over the reign of WTO in September, has earlier expressed concerns over alternative regional trade pacts, which he feared would render WTO “obsolete” if the organisation “doesn't start clinching deals”. An AFP report quoted Azevêdo saying, “Such alliances could have ‘tragic’ consequences on poor nations by denying them a place at the trade-rules table.”

Kevin Gallagher, a globalisation expert at Boston University,in his recent article, US unprepared to limit swings in food prices, for The Japan Times, called on developed nations such as US to do right by the world's poor at WTO and grant them food security.

“The United Nations’ Special Rapporteur for food has just noted how the WTO is incompatible with food security measures. It is a scandal that the world’s countries had a golden opportunity to fix a fundamental distortion in the global trading system that causes impoverishment — and that the US has flatly blocked it at the WTO. By dumping the WTO unless it accedes in full to US demands, the US, despite all its rhetoric in favour of multilateral approaches, makes plain its intention to focus on trade treaties like the Trans-Pacific Partnership. In such deals structured by the US, food is largely off the negotiating table. This further underscores that regional trade deals distort the world economy and put developing countries at an unfair negotiating disadvantage relative to the US. The WTO, with its one-country-one vote negotiating structure, can yield far more equal outcomes,” Gallagher argued.

[Click here for Singapore's ministry of trade and industry statement on just concluded TPP ministerial meeting in the city-state, which ended with no headway, just a promise to meet again in the new year]