India has refused to sign the Bali accord put forward by the world trade organisation (WTO) that would have resulted in the conclusion of the first global trade deal in 20 years. It is undoubtedly a failure for the WTO and leaves the organisation in a cul-de-sac, but how did it happen?
The WTO negotiations, called the Doha development round, consist of different blocs. The industrialised countries had the clear aim of gaining more access to markets in the countries in the global south without opening up their own markets for agricultural imports. Lately, the European Union has resorted to negotiating bilateral trade agreements with regions of the African, Caribbean, and Pacific states.
"A global trade system is more beneficial for all in the long-term"
The transatlantic trade and investment partnership (TTIP) agreement with the US is set to establish the foundation of a new world trade architecture in which the two trade giants are able to set global standards while the rest will have to adapt. The recent circumvention of the WTO has put a lot of pressure on these negotiations.
In order for the WTO to stay relevant within this changing context, an agreement would have been necessary; the pressure was high and a tentative agreement was reached in December 2013 in Bali. It included lowered trade tariffs and lowered agricultural subsidies in developing countries, including support for food programmes. It was almost done, but it also would have meant that India would have to phase out its food support programmes for the 400 million people in the country that live in absolute poverty. The agreement was clearly not in favour of a development strategy that aids the poor and very poor in the world, but was simply a possibility for globalised enterprises to enjoy access to further markets.
The old conflicts of interest came to the surface again and it was the new Indian government that could not agree to such terms of trade and blocked the agreement in order to secure its food programmes. But what do we do now? There are different possibilities for moving the global trade agenda on. Either a new bilateralism will come into being, marked by economic partnership agreements, TTIP, the trans-Pacific partnership and possibly south-south trade agreements between the newly emerging countries, or the WTO will be able to re-establish a comprehensive world trade system. The latter possibility would be the more efficient and just option, but would come at a price. The interests of the developing countries must be taken into consideration; they need a truly fair deal. It is only reasonable for India to insist on helping its poor population and making a stand against free trade ideology.
A comprehensive world trade system would mean that developing countries' interests would be taken into consideration. This would include a right to protect their small farmers and their infant industries. In short, it would entail a more differentiated view on trade liberalisation with the priority of achieving development and ending poverty. However, negotiation practices within the WTO also need to change. The non-transparent and non-participative informal consultations must come to an end and more should be discussed with a fair representation of all WTO members.
A global trade system is more beneficial for all in the long-term. It could result in fair and balanced development for many countries. That is an aim worth fighting for.