As Sungjoon just mentioned, after many long days and nights, hard-working trade officials got a deal done in Bali. Congrats to all of them, and I hope they get to take a long vacation now. (I noticed in my facebook feed that some other folks hanging out in Bali had it a little easier, and were lounging by the pool or on the beach -- you know who you are!)
Now that there is an agreement, and various new legal obligations that will come into force (at some point -- it's a complex process), I feel obligated to look into some of the details that I had been trying to avoid. "Trade facilitation" in particular was something that I just couldn't face. It is described here as follows: "The trade facilitation decision is a multilateral deal to simplify customs procedures by reducing costs and improving their speed and efficiency." No doubt this will very useful (even if the "$1 trillion" in new trade estimates are exaggerated), but it sounds a little dull. However, if it's going to a real agreement soon, I guess I need to look at it.
The draft version is here. (There may be some minor "scrubbing" that takes place, but it should end up about like this.) In skimming through it, what struck me was that much of it looks like kind of a "good governance" agreement for customs procedures. Basically, it is a requirement that every government run an efficent, transparent and fair customs process. Some examples:
-- governments must promptly publish import procedures, duty rates, and classification/valuation rules
-- governments shall issue advance customs ruling where requested
-- governments shall provide for administrative/judicial review of customs rulings
All of these items are, I would say, mundane but useful, and should help trade flow a bit more easily. Beyond these governance issues, there are also rules to help speed up the flow of goods across borders:
-- governments shall have procedures for expedited shipments of certain goods
-- governments shall establish procedures for pre-arrival processing
-- and "authorized operators" can move goods through customs faster
Here's one thing that struck me about all of this. Don't most developed country governments already meet these requirements? Will the U.S., EU, Japan, etc. even have to do anything to implement this? I'm always suspicious of international agreements, in the trade law context and outside of it, where some parties don't have to take any actions at all. And here, it seems like there was resistance to new obligations that might require developed countries to take on additional obligations, as noted by Inside U.S. Trade:
The U.S. also successfully fended off demands by other developed countries to create a binding obligation for WTO members to provide a "single window" under which all required documentation for import or export be submitted through a single entry point. The U.S. does not have such a system, and obtained "best endeavor" language on this obligation in the trade facilitation deal.
Related to this, I've been wondering what the U.S. might have to do, if anything, in its domestic political process to affirm this new, binding agreement. Is this part of the Trade Promotion Authority debate? I had been assuming it was not, because nobody ever talked about what might need to be done domestically in relation to Bali, but I wasn't really sure why it was not. If the U.S. is taking on new trade obligations, doesn't Congress have to sign off on it? I gather that this agreement will be put into effect in the WTO system via an amendment to the WTO Agreement. But that can't be a reason to avoid Congressional approval. Surely you couldn't just amend the WTO Agreement to prohibit anti-dumping without such approval.
Then I saw this in Inside U.S. Trade:
At the press conference, Punke said the Obama administration does not believe the deal requires congressional approval. "Our analysis of the trade facilitation agreement is it can be effectuated through administrative means and would not require legislation to put it into force," he said. The obligations of the trade facilitation agreement are enforceable under the WTO Dispute Settlement Understanding.
So the administration's view is that Congress need not weign in. But why is that? Is it because the agreement, as noted, doesn't require the U.S. government to change anything about domestic law (or at least, it doesn't require Congress to take action in this regard)? That's my guess, but those who know more should feel free to explain this in the comments. Are there any limits to when the WTO Agreement can be amended without Congress having to sign off, as long as no U.S. legislative change is needed? To take one (obsure) example: Could the U.S. agree to an amendment to get rid of the non-violation remedy without Congressional approval?
One final point. Making all these adjustments will cost developing countries a lot of money. How will they achieve it all? The agreement says this:
Assistance and support for capacity building16 should be provided to help developing and least-developed country Members implement the provisions of this agreement, in accordance with their nature and scope.
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16 For the purposes of this Agreement, "assistance and support for capacity building" may take the form of technical, financial, or any other mutually agreed form of assistance provided.
I take that to mean there will be developed country government money and resources being thrown around to help with assisting developing country governments in the transition. For those who specialize in these sorts of government contracts, this may mean some new business.
