💾 Archived View for gmi.noulin.net › mobileNews › 5147.gmi captured on 2024-08-18 at 22:38:16. Gemini links have been rewritten to link to archived content
⬅️ Previous capture (2024-05-10)
-=-=-=-=-=-=-
2014-08-05 09:55:31
Aug 1st 2014, 15:35 by E.M. | LONDON
THE trade-facilitation agreement the 160 members of the World Trade Organisation (WTO) concluded in Bali in December may have sounded drab, but it was important for two reasons. First, it set in motion big cuts in red-tape at the world s borders, which were projected to boost the world economy by $400 billion a year. Second, it put paid to the widespread view that the WTO had become a useless talking shop, incapable of fulfilling its mission to liberalise world trade. For the first time in our history the WTO has truly delivered, its director-general, Roberto Azev do, exulted at the time.
No wonder, then, that when the deal unexpectedly collapsed this week, Mr Azev do urged members to reflect long and hard on the ramifications of this setback . The WTO s members had until midnight on July 31st to signal their approval of the deal a step that had been considered a formality, since they had all already signed up to it in December. But India, which almost prevented an agreement then, decided to strangle it in its infancy instead. It complained that the immunity it had been given in Bali from complaints about protectionism in the name of food security was not broad enough. When other members refused to re-open the deal, it withheld its approval, in effect killing it.
India s obduracy is particularly disappointing, in that its foot-dragging in December was dismissed by many as electioneering by the outgoing Congress government before India s elections earlier this year. The new government, it was assumed, would be more accommodating, especially if it was led by the relatively pro-business Bharatiya Janata Party (BJP). As it happens, the BJP won a victory so sweeping that it does not need to rely on the support of minority parties in India s parliament. But the new government has nonetheless proved even more intransigent than the last.
In theory, the WTO can dust itself off and start negotiations to revive the deal in September. But the perception that it is too big and divided a forum to achieve anything is growing stronger. It is now 20 years since the body, then called GATT, managed to agree on a big global deal to liberalise trade. In the interim, many regional trade bodies and free-trade areas of varying degrees of vigour have sprung up. The countries that are keenest to promote trade will presumably focus their attention on these other groupings, rather than the seemingly futile proceedings of the WTO.
There is nothing wrong with regional deals, but they not as beneficial as freer trade worldwide. They also tend to exclude poorer countries, who would have been the biggest beneficiaries of the trade-facilitation agreement. As Mr Azev do said this week, My fear is that the smaller and more vulnerable an economy is, the more it will suffer.