Bali Agreement to Boost Global Growth, Cut Down on Poverty

Bali Agreement

The Bali agreement, which was signed by 160 members of the World Trade Organization, has been seen as a major achievement, especially for developing countries. The Bali package was a selection of issues from the Doha round negotiations that included policies for developing countries, trading facilities and policies on trade in agricultural products.

The Bali agreement, which has taken a different step in allowing developing countries to provide subsidized food to its poor citizens in a bid to promote food security, would have been frowned upon under the WTO Pact of 1994. This clause was lobbied for by India, which would allow it to offer farm subsidies for public stockholding in order to ensure food security. The United States delegation objected to the clause, stating that it would increase trade restrictions, especially in agriculture. However, the clause only allows developing countries to provide subsidies for their farmers for food security for a period of four years. Other development provisions in the agreement include measures to help African nations improve cotton production, encourage developed countries to do away with quotas and duties on imports from the least-developed countries and lower barriers to services companies from the least-developed countries.

The Bali agreement has been seen as being more pragmatic as it is considering the interests of developing nations in providing food security for its citizens and also promoting free trade.  The deal could boost global trade by $1 trillion by reducing bureaucratic delay for goods, a major boost for small businesses. This is because the WTO has been criticized for promoting the interests of the developed world over developing nations. Despite the fact that all members of the WTO are considered equal, levels of development and economic growth have rarely been seen as a factor in promoting fair trade. Developing countries have seen some of their indigenous markets being killed through open markets that allow goods of higher quality from developed countries to compete with the same goods that have lower quality. Many scholars argue that for developing economies, government support through subsidies is crucial to promote fairer competition with goods from developed countries.

Because of these accusations, the WTO began the Doha Development Agenda initiative, which was to consider the interests of the developing world. The agenda of the Doha round was to help developing economies join the global marketplace and boost their economies at the same time. Moreover, the aim was to reduce subsidies for farmers and fishermen and cut import taxes so as to make it easier for goods and services to cross national borders. However, the round has stalled since 2001 because the developed economies seem to dominate the talks and exert their interests above the developing economies.

The Bali agreement has been considered a major boost for the credibility of the WTO, which was quickly losing relevance in global trade. With the financial meltdown, protectionist policies have increased over the past years and regional and bilateral trade have been a preference by most countries.

By Gertrude Chelimo

Sources:

India Times

The Guardian

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