The World Trade Organization (WTO) concluded on December 7 a multilateral trade liberalization agreement that focuses on trade facilitation, agriculture, and developing country issues. WTO also said it will take the next 12 months to prepare a work plan on resolving other Doha Round issues and approved the accession of Yemen as the body’s 160th member. It is anticipated that the WTO General Council will adopt the text of the agreement by July 31, 2014. Press sources state that it could enter into force for those countries that accept it in approximately two years.
“Today, we celebrate a new WTO not just because we have reached an agreement – but because of the way we did so. Throughout this process we have been reminded over and over again that we are, now, a truly multilateral organization. Varied voices have carried equal weight. Developed countries have partnered with developing countries to find solutions. Instead of seeing agreement fall into a chasm of division between rich and poor, members at all levels of development, on a level footing, have built bridges for the common good,” said U.S. Trade Representative Michael Froman.
According to the Office of the U.S. Trade Representative, the Organization for Economic Cooperation and Development estimates that this agreement can cut trade costs by nearly 15 percent for low-income countries and 10-percent for high-income countries. Other studies estimate that it could have total global economic benefits of between $400 billion and $1 trillion.
The agreement contains provisions to shield public stockholding programs for food security in developing countries so that they will not be challenged legally even if a country is in danger of breaching its domestic support limits for these programs. However, the Office of the U.S. Trade Representative (USTR) states that this freedom from challenge will only be available to members if their programs do not distort trade and if they meet certain transparency conditions to share the details of their support mechanisms. This interim solution will remain in place until there is a permanent one, which a new work program aims to produce within four years.
On the administration of persistently under-filled tariff-rate quotas (TRQs), members agreed on a combination of consultation and providing information when TRQs are under-filled. The United States, Barbados, the Dominican Republic, El Salvador, and Guatemala reserve the right not to apply this system after six years.
WTO reported that other agreed-to provisions include adding some development and land-use programs to the list of general services that are candidates for being allowed without limit because they cause little trade distortion and making a political commitment to reducing export subsidies in agriculture and keeping them low. Another provision improves market access for cotton products from the least developed countries, with development assistance for production in those countries.
The legally-binding trade facilitation agreement has the objectives of accelerating customs procedures; making trade easier, faster, and less costly; providing clarity, efficiency, and transparency; reducing bureaucracy and corruption; and using technological advances. The agreement also has provisions on goods in transit — an issue particularly of interest to landlocked countries seeking to trade through ports in neighboring countries. There will be assistance for developing and the least-developed countries to update their infrastructure, train customs officials, and meet other costs associated with implementing the agreement.
USTR’s two statements of December 7 regarding the conclusion of negotiations are available here and here.
