Over the last weekend in Bali, delegates of 159 states managed to agree on a world trade agreement – in a deal that was described as historic by British Prime Minister Cameron. Roberto Azevedo, the new head of the World Trade Organization (WTO), got very emotional after he had succeeded to broker a worldwide deal despite the blockade of Cuba and India at the last moment.
The agreement is meant to decrease the cost of exports by simplifying customs procedures and eliminating imports duties while ensuring that developing countries also have a say. The deal aims to provide low-income economies with wider market access to industrialized economies and allow more flexibility on the issue of food subsidies. Mr. Azevedo commented that for the first time in history the WTO has been saved, while EU Trade Commissioner, Karel de Gucht, added that the WTO was actually saved the day the deal was signed. Since its establishment in 1995, the WTO has not managed to draft a word trade deal, and the Bali Agreement is a significant step towards such a deal.
Export-driven economies, such as Germany, have embraced the agreement for its estimated positive impact on profits. First forecasts suggest that the deal should provide Germany with additional 60 billion euro in revenue annually. Great Britain has also expressed its satisfaction with the Bali achievement as it is expects its exports will grow and more jobs will be created. Prime Minister Cameron said that if only 100,000 small businesses begin exporting or spread to new markets, this could make additional 30 billion pounds and 100,000 new jobs.
Yet, developing countries seem to be again skeptical about the deal as it already tends to favor industrialized countries and big transnationals. Oxfam, the British development agency, has already said the gains of the deal are over-estimated and the cost of implementation for the poorest nations neglected.
