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Parliamentary Conference on the WTO

12th December 2013

Report of Jonathan Djanogly MP on the Parliamentary Conference on the WTO, Bali, 2 to 5 December 2013, in connection with the 9th Ministerial Conference.

Some two decades since the start of the Doha Development Round (DDR) in 2001 and after years of unrealised expectations, would a breakthrough in negotiations be possible? Or would the Bali conference represent another nail in the coffin of multilateral free trade initiatives or, yet worse, constitute a sign that the useful life of the WTO had itself expired?

These were some of the key issues being asked as I prepared to go to the WTO Parliamentary conference in Bali. This was my first contact with the WTO since visiting them with the DTI Select Committee in Geneva in 2003 and, given the lack of progress on multilateral free trade initiatives, it didn't seem that I had missed very much in the meantime. As an alternative to the multilateral route, countries have been increasingly looking to secure bilateral and regional deals.

Looking to achieve a meaningful yet achievable settlement, and mindful of numerous failed previous attempts to complete the entire round, Bali was in effect aimed to constitute a “Doha lite”. This would be achieved by removing proposed deals (the so called Singapore issues) on foreign direct investment, competition rules and transparency on government procurement issues. Also absent were the original DDR proposals for reducing tariffs and taxes on imported goods and barriers to services. Instead the decision was taken to concentrate on trade facilitation, agriculture and special treatment for developing countries.

Yet the potential prize of securing the Bali round was still very significant for world trade indeed. Independent valuations stated the value of potential new trade to be $100 bn per annum added to global GDP. This was half the value of the overall DDR figure, but still a huge sum that would lead to some 21million jobs being created. Trade Facilitation would cut red tape and delays at the borders - important given that up to 7% of the value of goods are lost in inefficiencies. The deal represented significant gains in trade for developing countries and would also provide them with technical assistance to aid implementation. However, everyone would benefit to some extent. The EU would gain in an amount of €14bn and the UK €1 bn per annum.

By mid November things were looking positive as officials worked overtime to narrow the areas of difference. But by the time of the Conference there were still a few countries not on board, importantly (again) India who were insisting on including elements of agricultural subsidy, that others wanted deferred to wider Doha negotiations. Other countries, Cuba and Kenya come to mind, had their own issues - although what they exactly were seemed to be more a matter of conjecture than printed policy. A pre brief in Westminster, with Trade Minister Lord Green and his officials, confirmed that a deal was possible, even likely, but certainly not yet in the bag.

In Bali, on the day before the Ministerial Conference convened, the Parliamentary Conference met. The mood of the Parliamentary delegates, representing 64 of the 159 WTO member states, was resolute in support of a deal - to say the least. Whilst this was my first WTO conference, many other parliamentarians had clearly become increasingly frustrated at their ministers' collective inability, over many years, to deliver and they used the session to vent their feelings. The Indonesian Trade Minister, Gita Wirjawan, gave a very impressive speech and no less than a dozen Indonesian parliamentarians were present. Not only were the Indonesians intent on presenting a very well run conference (which it certainly was), but as the Member for Java West (electorate 3 million) confirmed to me, they clearly wanted Bali to be remembered as a success rather than another failed opportunity.

Interestingly and importantly, there was no longer the emphasis on the north versus south (developed/non-developed) split that had characterised so many meetings in the past. Furthermore, the African and BRIC blocs had clearly decided to depart from India and accept the proposals. This really was generally seen to be about improving trade and the living standards of everyone. Furthermore, it was generally accepted that the NGOs had been much more heavily engaged, compared to previous conferences when many had come out against proposals. One aspect that did resonate was that we needed to find mechanisms that improve engagement with business, including SMEs; a point made on the floor, by our own Eastern Region MEP Robert Sturdy. However, and ominously, the Indian parliamentary delegation did not attend the Parliamentary session.

The organisation of both the Ministerial and Parliamentary conferences was excellent and our Indonesian hosts, were as welcoming as could be. Parliamentary representatives were warmly received to a dinner hosted by the Indonesian Parliament's Speaker Marzuki Alie on the first evening of the conference. After dinner, I met with British BIS and DIFID and Cabinet officials, our WTO ambassador in Geneva and Jakarta representatives for a helpful briefing. Still, a mood of cautious optimism prevailed.

I attended the Opening ceremony of the Ministerial conference, with 159 countries represented by their ministers, parliamentarians and officials - quite a memorable sight. Our trade Minister, Lord Green was on fine form, moving rapidly between Ministerial chats and then sitting on the platform, as one of the Conference vice chairmen. The President of Indonesia, Susilo Bambang Yudhoyono, opened the proceedings, saying that: 'Failure is not an option' and reiterating that ' success in Bali will show that we are not going to leave Developing Countries behind'. The WTO Director General, Roberto Azevedo, then made clear that this was not going back to Geneva for further talks and that it was 'now or never' for a deal to be struck. However, as we left the hall, we were met by a demonstration in favour of India's position against a deal!

The following day was taken up with NGO led meetings. The CUTS one in particular stood out, as I was impressed by the presentations made by businessmen talking about the real life potential for improved cross border trade arising from the proposals. It was also interesting to hear how, in the world of multilateral trade negotiations, the voice of the consumer is rarely heard.

However, back in the Ministerial Conference, the Indian trade minister, Anand Sharma, spoke and effectively dug his heels in - time was running out.

The Bali deal contained 10 texts of which 8 had been effectively settled previously in Geneva and one, trade facilitation, was tied to agreeing the final text: food security. India was demanding an extension to the Bali terms to the extent that India should get a release from its food subsidy limitations. Minister Sharma was maintaining that this was vital for India's food security. The EU and the US were maintaining that India should be in a position to comply. India's neighbours were also keen for India to concede as the subsidy (affecting grain provided to 80% of India's people) effectively distorted their own markets. A compromise suggested was that the WTO would agree to renegotiate India's position within four years, but failing agreement the so called 'peace clause' should remain. But even here India seemed to be unyielding.

Free trade has been attacked by some for increasing unfair distribution within countries. But the point is that free trade, simply increases wealth. It is up to national governments to then decide how it should be distributed.

By the start of the final day of the Parliamentary conference, a deal was still tantalisingly absent. At the Heads of Delegation meeting the previous day, the WTO Director General, Roberto Azevedo, had received a strong mandate from member states (including Developing countries) to settle all texts. Talks were therefore ongoing and we were told that there 'was still a good chance for a reasonable outcome'!

The mood of Parliamentarian colleagues was by now, somewhat unsurprisingly, a bit on the grumpy side. Emotions were running high and patience thin as the speeches started. Some representatives spoke negatively towards multilateral trade deals, probably thinking of their home audiences in the event of failure, but most held firm hoping for a deal. However, in the event, two days later a deal was signed. "For the first time in our history, the WTO has truly delivered," said a relieved looking Mr Azevedo.

I personally, found it fascinating to attend the Conference and come to understand the trade issues from other nation's perspectives. For many poor countries, moving towards free trade and away from protectionism (and corruption) is a brave thing to do. Yet at the same time the multilateral approach provides the poorer and smaller countries with a say and inclusion, that is too often being lost in bilateral and regional deals. It seemed that for the first time in WTO history, developing countries understood this fundamental point.

The democratic review and approval, represented by the Parliamentary Conference, was an important aspect of the overall deal. I personally felt a sense of democratic empowerment to be included in such a conference. One does not often find 159 countries unanimously agreeing with each other to increase free trade or anything else for that matter!

The WTO did deliver. The question now is whether Bali has given the world a taste for moving further towards completing Doha on a multi-lateral basis? We shall see; but for the moment I think I can say that the nation states of the world have, through the WTO, been brought closer together through free trade; and that must be a good thing.

Jonathan Djanogly MP

Jonathan Djanogly with Trade Minister Lord Green at the Parliamentary Conference on the WTO


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