It's do or die for Doha trade deal at WTO Bali meeting

PUBLISHED : Monday, 02 December, 2013, 10:31pm
UPDATED : Tuesday, 03 December, 2013, 5:26am

Crisis is the natural state of world trade negotiations. But this week will be different.

Ministers meeting in the Indonesian resort of Bali from today until Friday will decide the fate of the World Trade Organisation, with two possible outcomes: a global trade agreement, the first since the WTO was creat-ed in 1995; or a failure that kills off the Doha round of trade talks and casts the WTO into obsolescence.

The 159 WTO members have pushed the crisis to the brink by failing to finalise the text of a deal in Geneva, leaving a Swiss cheese of a draft after marathon talks that WTO director-general Roberto Azevedo finally halted at 7am last Monday.

Azevedo had repeatedly said the text must be settled in Geneva and there could be no negotiations in Bali. Ministers indulging in political point-scoring and rhetorical grandstanding are thought unlikely to succeed where their Geneva-based trade negotiators have failed.

"Will they or won't they negotiate in Bali? Some will try but the recalcitrants will hold out unless they get overruled by their heads of government," said Simon Evenett, professor of international trade at the Swiss University of St Gallen.

"For that to happen, enough prime ministers and presidents are going to have to be convinced to pick up the phone and call their peers and, given what little is left on the table, why should they bother?"

The WTO has already significantly lowered its sights since a decade of Doha talks broke down, forcing it to focus on a less ambitious set of reforms.

The agenda for Bali has already suffered one big loss: talks on free trade in technology goods, slated for agreement, collapsed after China insisted on a large list of exemptions.

But negotiators say the key stumbling block is India. "If the Indians can do a deal, the others who are left will find it very difficult to stand in the way," a diplomat said.

Indian Trade Minister Anand Sharma has promised "no compromise" on India's policy of subsidising food for the poor.

But it is not clear if he will accept the draft Bali deal, which would permit the subsidised food policy for four years, or if he will push for a permanent exemption, which risks leaving India exposed to massive legal claims if Bali fails.