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World Trade Organization reaches its first-ever global trade pact

tempo editorial dec232013

The World Trade Organization (WTO) reached its first-ever agreement designed to lower barriers to trade during the Ninth Ministerial Conference of 159 WTO member-countries in Nusa Dua in Bali, Indonesia, on December 7, 2013. It was the trade body’s first membership-wide agreement since it was created 18 years ago. The Philippines has been a member since WTO’s creation on January 1, 1995.

The biggest component of the “Bali Package,” as it is called, is trade facilitation that would make it easier and cheaper to move goods globally through simplified customs procedures. Rich countries and more advanced developing countries agreed to cut tariffs on products from the poorest nations. The package also included pledges to limit agricultural subsidies and policies to aid least-developed nations.

A study by the Washington-based Peterson Institute for International Economics projected that the agreement would boost world trade by $1 trillion and create 21 million jobs, 18 million of them in developing nations. The agreement simplifies procedures for doing business across borders, improves duty-free access for goods sold by poorest countries, and gives developing countries more scope to raise farm subsidies. The estimated cost cuts from the trade facilitation measures are 10% for developed countries and 15% for developing countries. For every 1% in cost reduction, the study projected worldwide income would increase by more than $40 billion, 65% accruing to developing countries. For the poorest nations, the increased trading capacity would lead to more investments in logistics and infrastructure.

The agreement includes agriculture provisions calling for the elimination of export subsidies and better administration of tariff-rate quotas. Developed countries are encouraged to remove quotas and duties on imports from least-developed countries and to lower barriers on service companies from least-developed countries. WTO said the package is not an end; it is a beginning, and a commitment not only to WTO but also to the completion of the agenda of the 12-year-old Doha Round of Talks.

The Manila Bulletin, led by its Chairman of the Board of Directors Dr. Emilio T. Yap, President and Publisher Atty. Hermogenes P. Pobre, Executive Vice President Dr. Emilio C. Yap III, Editor-in-Chief Dr. Cris J. Icban Jr., Business Editor Loreto D. Cabañes, Officers and Employees, congratulate the World Trade Organization, headed by Director-General Roberto Azevedo and Deputy Directors-General Yi Xiaozhun, Karl-Ernst Brauner, Yonov Frederick Agah and David Shark, other Officers and Personnel, in their collective efforts in negotiating and formalizing trade agreements to boost the global economy in our Republic of the Philippines. CONGRATULATIONS AND MABUHAY!