Sunday, 12 January 2014

Bali package,step towards Free Trade.

On Dec 7-2013,representative from the WTO 159 members reached an agreement on first multilateral deal in WTO history.Although the trade facilitation agreement dubbed the ''Bali Package'' did not address the north south issue.
The Bali Package commits WTO members to move towards non-tariff trade barriers.the trade agreement has been criticized for failing to meet the goals set in 2001,Doha development agenda.
Doha round of trade negotiations could not succeed because most of developing countries including India,did not agree to remove agricultural subsidy they provide.though developing and developed country gained from trade resulting from removal of tariff and non-tariff barrier.and WTO has been making constant effort towards integration .and Bali package is one of the result of those effort.
Here are some 3 important point upon which Bali package was based
The first pillar is Agriculture. This is the cornerstone of the Doha Development Agenda which the WTO has been working on since 2001. Agricultural issues are very dear to developing countries, and the Bali Package delivered some important outcomes.
For example, it sets us on track for a reform of export subsidies and measures of similar effect, and it makes practical progress towards better implementation of the tariff quota commitments assumed in the Uruguay Round. There is also a reaffirmation and a deepening of the political commitments assumed in Hong Kong on trade liberalization and the reduction of distorting support to cotton — a very important issue for the African countries that grow that crop.
The Package also provides temporary protection for food security programs in developing countries, which allow for the stockpiling of grain for subsequent distribution to the poor. As we know, some of those countries could be exposed to legal challenges in the WTO for exceeding the limits stipulated in the Agriculture Agreement for certain types of domestic support. So, in addition to the temporary protection against legal challenges, the Bali Agreement states that a permanent solution will be negotiated and concluded before the 11th Ministerial Conference in four years' time.
The second pillar of the Package is Development.
Here, a monitoring mechanism will provide for the review and strengthening of special and differential treatment provisions for developing countries, which are contained in all WTO multilateral texts. This achievement is vital for the equilibrium and efficacy of the multilateral system.
There are also a number of specific measures to support the Least-Developed Countries.
They include reforms that would enable services providers in LDCs to enjoy new export opportunities in developed country markets.
They also include steps to simplify rules of origin, which again will open up new export opportunities for those countries specifically.
Under this pillar we will also see improvements in trade preference arrangements which extend exemption from tariffs and quotas to LDC exports.
The third and final pillar is Trade Facilitation, which sets out to simplify and modernize customs procedures, and make them more transparent, thereby reducing transaction costs. The Agreement on Trade Facilitation will be able to provide a significant — and today much‑needed — boost to the global economy, delivering growth and jobs. This could be worth up to $1 trillion per year to the global economy — generating up to 21 million jobs.
Significantly the Agreement also ensures the provision of technical assistance to support developing economies and the least-developed economies to implement these modernizing reforms, and therefore help them integrate better into global trade flows.
Clearly estimates can vary, but, once the Agreement is implemented, there could be an expansion in developing country exports of up to 10% — compared to a 4.5% expansion in developed countries.
It is true that the deal represents only part of the Doha Development Agenda. But there can be no doubt that this is a significant package that will provide a considerable economic boost and improve the lives of millions of people around the world — particularly among the poorest and in countries whose economies have stalled and are suffering high levels of unemployment.
In the specific case of the European Union and its member States, the conclusion of the Bali Package reflects that grouping's chief negotiating objectives. With the Agreement on Trade Facilitation, opportunities for expanding trade will clearly increase. The Agreement also offers potential to facilitate the internationalization of small and medium‑sized enterprises, which are important drivers of job creation and income distribution in many European countries.

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