World Trade Organization: Finally a global deal

“Here’s some really good news!” said Marc Beise in the Süddeutsche Zeitung (Germany). Five years after the global economic crash, the World Trade Organization has successfully brokered a trade pact that should generate jobs and wealth around the world. The deal concluded in Bali, Indonesia, last week will slash red tape at borders everywhere. “While that may sound technical,” the pact could raise global output by $1 trillion, much of it in the developing world, and create more than 20 million jobs. Today the costly and time-consuming need to meet specific import standards for each country acts as a de facto tariff, even when actual duties are low. Streamlining the process will boost trade everywhere and spur on “the triumphant march of the market economy for the benefit of many.” Even if free markets don’t enrich all people equally, they still help “more people than any other economic model.” As WTO Director-General Roberto Azevêdo said, “We have put the world back into the WTO.”

Hold your applause, said Luise Ungerboeck in Der Standard (Austria). A trillion dollars in savings? “Over what time period?” Maybe jobs will be created, but attributing them to the deal will be impossible. Just one thing is clear: This agreement is great for exporting nations like Germany, Austria, and the U.S., which can “trim their customs agencies and sell their goods more easily around the world.” Yet as with so many deals, “the small print will determine whether the developing countries can participate and flourish.” Under the deal, India won the right to preserve its food subsidies, while the poorest nations gain easier access to world markets. But will that really help them?

Probably not, said Ni Komang Erviani in The Jakarta Post (Indonesia). The easing of customs rules was the pact’s main plank, but it only ensures “easier access and profits for transnational corporations.” In most countries of the developing world, more than 80 percent of exports are controlled by the five largest companies. Those firms will benefit, but what about Indonesian farmers? They won’t be able to compete against cheap produce flooding in. Farmers will end up selling their land for industrial production, and Indonesia will have to import its food. Despite the claims to the contrary of our trade minister, Gita Wirjawan, the rich nations are the winners here.

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Actually, the biggest winner is the WTO itself, said the Financial Times in an editorial. In its 18 years of existence, the body has failed to clinch a single trade agreement, partly because its rules require all 159 member nations to agree unanimously. Another failure would have “weakened the WTO’s authority in its other role as an umpire of global trade disputes.” This latest round of talks started in Doha, Qatar, in 2001 and kept sputtering out until the terms were scaled back. This deal is “significantly less ambitious” than originally envisioned, but it secures what was achievable. “There is no point in seeking unrealistic ‘grand bargains.’” From here on in, the WTO “should aim for similar Bali-style incremental deals.”