DAVOS, Switzerland — Trade ministers and chief negotiators from a cross-section of 23 countries — including outgoing U.S. Trade Representative Ron Kirk — signaled at a meeting here Saturday that a global trade agreement to ease the cross-border flow of trade and bring benefits of $1 trillion to the world economy “is doable” by December.
“There’s a sense that in order to move Doha [Round of trade talks] forward, perhaps the smartest thing we can do is to move forward around a smaller package that we all agree on,” Kirk said following the meeting. “I’m encouraged that the work we’ve been doing on trade facilitation in particular seems to be one item where there’s almost unanimous consent. We ought to get that done.”
Johann Schneider-Ammann, Switzerland’s minister for economic affairs, who hosted the meeting on the sidelines of the annual World Economic Forum summit here, said at a news conference that the mood was “very constructive” and noted there is a willingness to reach results at the World Trade Organization negotiations during the WTO ministerial summit to be held in Bali in early December.
“Ministers gave a strong signal they want to see a set of sustainable deliverables in Bali on three sets of issues,” he said. “First is trade facilitation as a core element.” The others were related to better administration of tariff rate quotas for agricultural products and perishable goods, and issues of special interest to the poorest developing nations related to intellectual property.
The politically sensitive cotton issue is not expected to be part of the Bali package, senior diplomats told WWD.
Similarly, Pascal Lamy, WTO director-general, said “trade facilitation is the largest part. It’s the one that will have most impact on enabling and opening trade.” He said that for the issue to be taken up in Bali, “My sense is that the deal has to be ready roughly around summer time,” a time frame he characterized as “doable.”
“We’re certainly very optimistic about a result coming out of Bali,” added Gita Wirjawan, Indonesia’s minister of trade.
The WTO’s Lamy pointed out that since a single undertaking on a full Doha Round package is not expected to unfold anytime soon, ministers decided to be more pragmatic and try to tackle issues ripe for a deal.
Differences between major trading powers such as the U.S. and the European Union, and large emerging powers such as China, India and Brazil over lowering barriers to trade in agriculture and industrial goods, including textiles and apparel, has stalled progress in the Doha talks launched in November 2001, and led to their collapse during various ministerial meetings in 2006, 2007 and 2008.
“Trade facilitation probably represents 60 percent of the economic impact of the [Doha] Round,” Lamy said.
Lamy and senior WTO officials said that with the cost of moving trade across borders estimated at around $2 trillion — total global trade is valued at around $22 trillion — cutting cumbersome red-tape impediments in half could stimulate the global economy by about $1 trillion.
Kirk said trade facilitation “might accomplish as much as 40 percent of the overall value of Doha. That’s a significant down-payment on getting it done. Ninety percent of people that export in this world are small and medium enterprises. If we can simplify the processes, the biggest beneficiaries are small farmers and businesses all over the world.”
He said enabling trade facilitation “is a huge shot in the arm” for the least developed countries, and securing a deal would help small businesses in the poorest countries “to get involved in global trade.”
Lamy added that digitization and simplification of customs would also enhance quicker processing and clearance of goods, boost security, and improve collection of duties in developing countries.