Finally, a happy ending! The Bali package has been delivered after a couple of serious last-minute hiccups, such as here and here. Concededly, the Bali package is subject to the typical half-full/half-empty evaluation. True, the Bali Ministerial Conference was originally designed to be sort of “rescue exercise” even at the outset. Still, one would not like to harbor any thought of the opposite outcome. Now, all eyes are on the “work program,” which is likely to be issued within the next couple of months.
In retrospect, most, if not all, pundits were quite pessimistic about this outcome. That pessimism would make sense from the typical realist perspective. For example, India has a big election next year and would not like to be boxed in; the United States has no fast track authority etc. But, here is my own theory.
Everyone, including India and the United States, did not want to lose the Trade Facilitation Agreement. Even politicians now appear to have realized that the “global value chains” (GVCs) are here to stay. Trade facilitation is special because this makes world trade look more like a big communal project, rather than a mere bargain. The moment we recognize the (potential) value of trade facilitation, we tend to admit, albeit implicitly, that the world trade system could be a “community,” rather than a mere contractarian arrangement made up of haggling. This new perspective merits even more considering the very nature of the WTO’s future homework, such as food security and non-tariff barriers. World trade need not be a sport competition of winners or losers. Everybody can win if the winners’ circle is adequately widened. Trade facilitation is expected to widen that circle, say to the extent of $1 trillion by one calculation! Likewise, trade facilitation is vital to “development.”
In a sense, WTO delegates in Bali could deliver the deal only by stopping bargaining. Of course, some (the half-empty people) might say that they just kicked the can down the road. But, the truth is that they have failed even to do so for the past twelve years! Here, my theory is that WTO members now subscribe to the fact that the old bargaining era dictated by an instant quid pro quo mentality might not always work. Now, more than ever the future of the WTO seems to hinge not on episodic, big time bargains but more on workman-like, diurnal dialogue that could widen shared grounds among members. After all, the remaining hardest nuts to crack ahead might not be necessarily amenable to the traditional give-and-take calculation.
In this regard, socialization among WTO members has become increasingly important, not only among (professional) delegates of WTO members but also between the WTO and other international organizations, such as the UN Food and Agriculture Organization (FAO), in case of food security, and the World Customs Organization (WCO), in case of trade facilitation.
The crown jewel of the Bali package (trade facilitation) is certainly good news to export-oriented economies. Note that the recent drive for regional FTAs, or mega-FTAs, gained political traction due to the bleak prognosis of the Bali meeting. So, one might reasonably speculate that multilateralism will be now back to the center stage. WTO members will face a good deal of follow-up meetings and discussions, details of which will be revealed in the soon-to-be-announced “work program.” Those inevitable multilateral commitments might take some oxygen out of the hitherto regionalist zeal. In fact, some countries that have not signed many regional trade deals especially hailed the Bali breakthrough.
For now, let us bask in a big relief.
[Coda]
Perhaps, the Bali package might be the last gift from Nelson Mandela on earth. Big speeches in Bali all competed to quote him: “It always seems impossible, until it’s done.” R.I.P Madiba…
