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Doha Development Agenda | Brussels, 11 August 2014

The Bali Decisions: Trade Facilitation, Development and Food Security - an Opportunity for all WTO Members

What are the Bali decisions?

At the 9th WTO Ministerial Conference held in Bali in December 2013, all WTO Members reached agreement on some elements of the Doha Development Agenda. Decisions were taken on issues to address specific demands of Least Developed Countries (e.g. in relation to services and rules of origin) as well as of other developing countries (e.g. by establishing a monitoring mechanism to review WTO provisions granting special and differential treatment to developing countries); on agricultural issues including food security; and on the Trade Facilitation Agreement.

Importantly, in Bali Ministers instructed WTO Members to prepare by end 2014 a clearly defined work programme to complete the Doha round.

Moving ahead with the Bali decisions will not only allow developing Members to take advantage of these important decisions but will allow for the conclusion of the Doha Development Agenda and revitalise the multilateral trading system, the only system that can ensure due attention is given to the interests of weak and vulnerable economies.

The Trade Facilitation Agreement

The Trade Facilitation Agreement, once implemented, will provide significant benefits to traders around the world and boost global economic growth. Its importance is widely recognised among the business community. It will reduce costs and increase trade, both on the import and export side. Besides, trade facilitation contributes to creating a better investment climate.

Trade facilitation is particularly important for developing countries, as studies show they stand to gain the most from more efficient trade procedures. Experience shows that developing countries who have successfully simplified and modernised their customs procedures have increased overall trade flows, enjoyed higher revenue collection (due to increase in trade volume and higher detection rates of fraud) and improved the efficiency of their customs administration. Trade facilitation measures also help small businesses access new export opportunities and regional/global value chains.

According to the OECD, the combined effect of trade facilitation improvements is greater than the simple sum of the impact of individual measures, reaching almost 14.5% reduction of total trade costs for low income countries, 15.5% for lower middle income countries and 13.2% for upper middle income countries.

The EU therefore regrets that the WTO was not able to adopt the Trade Facilitation Protocol within the agreed deadline of 31 July to allow WTO Members willing to engage in these reforms to ratify the Trade Facilitation Agreement - despite the overwhelming support of almost all Members of the WTO.

Public stock holding for food security purposes

As regards India's concerns on its public stock holding system for food security purposes, WTO Members agreed in Bali to a peace clause for India's food security policy. This means that WTO Members will not challenge India's food security measures that are otherwise not in line with WTO rules, until a permanent solution is found. This is an open ended solution that allows India to pursue its food security policy - as long as this is not negatively affecting the right of other WTO Members to pursue theirs.

In this context, it is difficult to understand the reason that led few WTO Members to block the adoption of the Trade Facilitation Agreement: what Ministers agreed in Bali already provided a mutually satisfactory and workable solution for all Members. The EU would have been ready to support any solution that would respect the substance of the agreements reached in Bali.

Where are we going from here?

First of all, the EU applauds the enormous efforts by the WTO Director-General Azevedo to find a solution among Members. WTO Members now need to reflect on the implications of this failure to adopt the Trade Facilitation Protocol.

The EU will engage fully in these reflections with WTO Director-General and with other WTO Members.