9th WTO MINISTERIAL CONFERENCE (BALI PACKAGE {3-6 dec, 2013})

First of all what is Ministerial Conference??

The topmost decision-making body of the WTO is the Ministerial Conference, which usually meets every two years. It brings together all members of the WTO, all of which are countries or customs unions. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.

As for example:  Bali, 3-6 December 2013 , Geneva, 15-17 December 2011

How WTO is different from other instituitions:

The WTO is ‘member-driven’, with decisions taken by consensus among all member governments. In this respect, the WTO is different from some other international organizations such as the World Bank and International Monetary Fund. In the WTO, power is not delegated to a board of directors or the organization’s head.

Highest authority: the Ministerial Conference 

So, the WTO belongs to its members. The countries make their decisions through various councils and committees, whose membership consists of all WTO members. Topmost is the ministerial conference which has to meet at least once every two years. The Ministerial Conference can take decisions on all matters under any of the multilateral trade agreements.

Second level: General Council in three guises 

Day-to-day work in between the ministerial conferences is handled by three bodies:

 The General Council

 The Dispute Settlement Body

 The Trade Policy Review Body

All three are in fact the same — the Agreement Establishing the WTO states they are all the General Council, although they meet under different terms of reference. Again, all three consist of all WTO members. They report to the Ministerial Conference.

Third level: councils for each broad area of trade, and more 

Three more councils, each handling a different broad area of trade, report to the General Council:

 The Council for Trade in Goods (Goods Council) 

 The Council for Trade in Services (Services Council) 

 The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council)

As their names indicate, the three are responsible for the workings of the WTO agreements dealing with their respective areas of trade. Again they consist of all WTO members. The three also have subsidiary bodies

.

Fourth level: down to the nitty-gritty

Each of the higher level councils has subsidiary bodies. The Goods Council has 11 committees dealing with specific subjects (such as agriculture, market access, subsidies, anti-dumping measures and so on). Again, these consist of all member countries. Also reporting to the Goods Council is the Textiles Monitoring Body, which consists of a chairman and 10 members acting in their personal capacities, and groups dealing with notifications (governments informing the WTO about current and new policies or measures) and state trading enterprises.

The Services Council’s subsidiary bodies deal with financial services, domestic regulations, GATS rules and specific commitments.

At the General Council level, the Dispute Settlement Body also has two subsidiaries: the dispute settlement “panels” of experts appointed to adjudicate on unresolved disputes, and the Appellate Body that deals with appeals.

‘HODs’ and other bodies: the need for informality 

Important breakthroughs are rarely made in formal meetings of these bodies, least of all in the higher level councils. Since decisions are made by consensus, without voting, informal consultations within the WTO play a vital role in bringing a vastly diverse membership round to an agreement.

WTO structure

All WTO members may participate in all councils, committees, etc, except Appellate Body, Dispute Settlement panels, and plurilateral committees.

Ministerial Conference

General Council meeting as

General Council meeting as

Dispute Settlement

General Council

Trade Policy Review

Body

Body

Appellate Body

Dispute Settlement panels

Committees on

Council for

Council for

Council for

Trade and Environment

Trade in Goods

Trade-Related Aspects

Trade in Services

Trade and Development

of Intellectual

Subcommittee on Least-

Developed Countries

Property ights(TRIPS)

Regional Trade Agreements

Balance of Payments

Committees on

Committees on

Restrictions

Market Access

Trade in Financial Services

Budget, Finance and

Agriculture

Specific Commitments

Administration

Sanitary and Phytosanitary

Working parties on

Working parties on

Measures

Domestic Regulation

Accession

Technical Barriers to Trade

GATS Rules

Subsidies and Countervailing

Working groups on

Measures

Plurilaterals

Trade, debt and finance

Anti-Dumping Practices

Trade and technology

Customs Valuation

Trade in Civil Aircraft Committee

transfer

Rules of Origin

Government Procurement Committee

(Inactive:

Import Licensing

(Relationship between

Trade-Related Investment

Trade and Investment

Measures

Doha Development Agenda:

(Interaction between

Safeguards

TNC and its bodies

Trade and Competition

Working party on

Policy

(Transparency in

State-Trading Enterprises

Trade Negotiations

Government Procurement)

Committee

Special Sessions of

Services Council / TRIPS Council / Dispute Settlement

Body / Agriculture Committee and Cotton Sub-

Committee / Trade and Development Committee /

Trade and Environment Committee

Plurilateral

Negotiating groups on

Information Technology Agreement

Market Access / Rules / Trade Facilitation

Committee

Key

Reporting to General Council (or a subsidiary)

Reporting to Dispute Settlement Body

Plurilateral committees inform the General Council or Goods Council of their activities, although these agreements are not signed by all WTO members

Trade Negotiations Committee reports to General Council

The General Council also meets as the Trade Policy Review Body and Dispute Settlement Body

Overview

About two thirds of the WTO’s around 150 members are developing countries. They play an increasingly important and active role in the WTO because of their numbers, because they are becoming more important in the global economy, and because they increasingly look to trade as a vital tool in their development efforts. Developing countries are a highly diverse group often with very different views and concerns. The WTO deals with the special needs of developing countries in three ways:

·         the WTO agreements contain special provisions on developing countries

·         the Committee on Trade and Development is the main body focusing on work in this area in the WTO, with some others dealing with specific topics such as trade and debt, and technology transfer

·         the WTO Secretariat provides technical assistance (mainly training of various kinds) for developing countries.

                                    

The WTO and the Millennium Development Goals

The United Nations Millennium Development Goals (MDGs) are eight international development goals that all 192 members and a number of international organizations have agreed to achieve by the year 2015 to end poverty. They include reducing extreme poverty, reducing child mortality rates, fighting disease epidemics, such as HIV/AIDS, and creating a global partnership for development.

The main goal that concerns the WTO is MDG 8, building a global partnership for development. However, WTO activities are also relevant to other goals, such as MDG 1, whose aim is to eradicate extreme poverty and hunger. In fact, the MDGs cannot be seen in isolation: they are all interconnected.

In Short

The WTO can ...

1 ... cut living costs and raise living standards 

2 ... settle disputes and reduce trade tensions

3 ... stimulate economic growth and employment

4 ... cut the cost of doing business internationally

5 ... encourage good governance

6 ... help countries develop

7 ... give the weak a stronger voice

8 ... support the environment and health

9 ... contribute to peace and stability

10 ... be effective without hitting the headlines

Following gains in MC @ BALI

1)      India secured a deal which would allow it to offer farm subsidies for public stockholding and food security programs without inviting any censure. It will now be able to smoothly implement its ambitious Food Security Act, which would otherwise have led to breaching of the farm subsidy limit allowed under the WTO pact of 1994.(Doha Round)

2)       Food Security Law may push India’s minimum support prices above WTO limits, but interim mechanism provides safeguards till WTO rules are corrected

3)       Agreement on Trade Facilitation could boost India’s exports

4)       India spearheads first agreement in the nine Ministerial held after the Doha Round

5)       India gains global leadership by getting a crucial poor-rich country imbalance corrected on a multilateral forum

6)       Support subsidies to poor farmers across all developing countries get safeguards against WTO rules

7)      PEACE CLAUSE- The developed countries were offering a 4-year "peace clause" to developing countries. In the meanwhile a working group will submit a proposal for suitable modifications in AoA before MC 10 (next one), decision on the same will be considered in MC 11.(making it 4 years, of 'peace clause' again, if I may say). India's demand for 'permanent solution' (farm subsidies by developed countries) is agreed in principle, but the decision regarding the same is to be on the agenda of MC 12, that's 6 years from now on, that's after 4 years of 'peace clause.' That means India gets FSA but developed countries get to keep their farm subsidies with no time limit, no conditionality, no reporting to WTO. It's difficult to call it 'victory' or 'historic' as Anand Sharma called it. It honorable face saving at the most

8)      MSPs for existing food grain items freeze. No more addition to food grain items or MSPs. 

9)      10% limit for protective measures for essential agricultural products, as under the Agreement on Agriculture (AoA) also remains in place. India is to report to WTO when Indian food grain procurement with MSP, for stockpiling to implement FSA, begins to go near or beyond that 10% limit. Other countries claiming to suffer from India's TDS (Trade Distorting Subsidies) are still, strictly legally speaking, free to sue India under Agreement on Subsidies & Countervailing Measure. But under this deal such countries 'shall refrain from' (exact phrase in the deal) doing so, for 4 years, that's de-facto 'peace clause.’

10)   Another neglected but important part of the deal is the Trade Facilitation Agreement which binds India to amend the 'Customs Act' to simplify, standardise the procedures & make them transparent. This is a welcome change. It will reduce corruption & increase trade. 

Aditya Prasad