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The EU’s role in the WTO deal in Bali

The European Union helped find a compromise on wording acceptable to the United States and India on the issue of food security – a question that India had previously declared non-negotiable – among other things, writes Jörg Leichtfried MEP

Patience is a virtue and in the end all the effort put into the World Trade Organisation ministerial conference in Bali last week paid off. We now have the first global deal on international trade since the WTO was created in 1995, a deal which has been accepted by all parties. Against all the odds, we could announce a successful agreement on Saturday morning – one day after the week-long meeting was expected to end.

Analysts say that this deal will boost world trade with estimates indicating that it could increase global gross domestic product by €1bn and create 20 million jobs. Trade is an important stimulus for economic activity and in the current financial crisis a boost such as this is very good news for the 22 million unemployed people in the European Union.

But the deal offers something even more important than these positive figures: after 18 years of WTO negotiations and 12 years into the so-called ‘Doha Development Round’, it was essential to reinvigorate a multi-lateral trade system that was falling into discredit. There was a real risk that WTO members would look elsewhere to do business and move from multi-lateral to pluri-lateral or regional-bilateral deals. But a multi-lateral system is still the best guarantee to achieve the open, free and fair trade, beneficial to both developed and developing countries.

Of course, the agreement does not fulfil everyone’s expectations. But it is better to be patient and bring everyone onboard to make sure we all advance together. To begin with, the agenda had to be limited to three issues on which a potential deal could be reached: facilitating trade by streamlining customs procedures and easing the flow of goods, agricultural issues including the thorny issue of food security and selected provisions on development.

The EU has played its part in facilitating a compromise and supporting the newly appointed WTO director-general Roberto Azevedo in the difficult task of finding comfortable landing zones for all members. It must be said, however, that a lot of the work was already done by his predecessor Pascal Lamy. In particular, the European Union helped find a compromise on wording acceptable to the United States and India on the issue of food security – a question that India had previously declared non-negotiable. The South-Asian country refused to curb a new food security programme costing €18bn.

The American representatives argued that this was subsidising agriculture and therefore violating international trade rules, whereas India said it was necessary to feed its people. In the end, India and other developing countries – with certain restrictions – will be temporarily allowed to continue with this kind of food-related development programme.

A long-term solution to food stocks will have to be found by 2017. But in the meantime, any such programme must not adversely affect the food security of other countries. To critics who say we did not focus enough on development in Bali I would say ‘be patient’. We first need to lay the foundations and build trust for further negotiations. This is the first step towards a more ambitious Doha development agenda. As of today, we should start to shape the post-Bali agenda. It should include the protection of labour, social and environmental rights. Ambitious goals take time but they are worth the effort.

Jörg Leichtfried is an Austrian MEP and a member of the Socialists & Democrats group in the European Parliament

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