Free Trade Forever
Representatives from the WTO’s 159 member countries recently agreed on the first multilateral trade deal in nearly two decades. While the Trade Facilitation Agreement did not address the most pressing issues, it remains an important milestone, as it reflects a broader trend toward global trade liberalization.
NEWTON, MASSACHUSETTS – On December 7, representatives from the World Trade Organization’s 159 member countries reached agreement on the first multilateral trade deal in the WTO’s 19-year history. Although the Trade Facilitation Agreement – dubbed the “Bali package,” after the Indonesian island where the meeting took place – did not address the most pressing North-South trade issues, it remains an important economic and political milestone.
The Bali package commits WTO members to moving toward lowering non-tariff trade barriers – for example, by establishing more transparent customs regulations and reducing trade-related paperwork. These changes might seem like bureaucratic minutiae, but the agreement’s impact – adding $1 trillion to global output and creating 21 million jobs worldwide – will be substantial.
The agreement has been criticized for failing to meet the goals set out in the WTO’s 2001 Doha Development Agenda. But these objectives – including improvement of market access in agriculture, manufacturing, and services; clarification of international trade rules; and progress on addressing relevant environmental issues – were overly ambitious. Even the modest Bali package was touch and go, requiring an extra day of negotiations to reach agreement on contentious issues like Indian farm subsidies and the US embargo of Cuba.