The World Trade Organization recently passed its first ever multilateral trade deal since being formed 18 years ago. The agreement is being trumpeted as a landmark deal that will reinvigorate the flagging Doha round of trade talks and boost global trade to the tune of 1 trillion dollars, but the real significance of the Bali deal is that an agreement was reached at all. On paper, it’s a modest victory; WTO members have agreed to measures that standardise and streamline customs procedures (and even this was almost torpedoed until India was granted special exemptions over its agricultural subsidies).

Earlier in the year, we spoke to two of the four Deputy Directors-General who served under Director-General Pascal Lamy until this September, Rufus H. Yerxa and Harsha Vardhana Singh. We took them some of your questions on the EU and global trade, particularly looking at whether or not the WTO was still relevant after the perceived failure of the Doha round.

The Doha trade talks have been dragging on for over a decade, with the deal in Bali perhaps offering a glimmer of hope to an eventual conclusion. In the meantime, however, the EU has begun to pursue a series of bilateral Free Trade Agreements as an alternative to Doha. The Transatlantic Trade and Investment Partnership (TTIP) with the US is by far the largest and most ambitious of these agreements.

Critics argue that bilateral agreements undermine the WTO, but we had a comment sent in by Eric suggesting that the TTIP talks could actually “spur other countries, fearing being left out, to push for broader trade liberalization”. What did Rufus Yerxa think?

From the standpoint of just an observer, I would say there is some merit to his argument. If the EU and the US are willing to push further bilaterally, it probably will spur other countries to want to move in concert with them and it could actually help us in the multilateral system to get countries back to the negotiating table in Geneva. After all, the US-EU relationship is the largest bilateral trade and investment relationship in the world. There still are some significant barriers left between them, even though overall the trade and investment flows are quite uninhibited. But there still are some specific sectors where there are problems, and if the US and EU can liberalise in those sectors it might make it easier for them to do so in a multilateral setting as well. So, we are hopeful that if they do go down this path of a bilateral deal then it will be something that will be compatible with their WTO commitment and also help to spur countries to come back to the table in Geneva and negotiate multilaterally.

Next, we had a comment sent in by Christos who said he “would not mind, if Doha fails or gets too complicated, for the EU to take initiatives and proceed with its interests [bilaterally].”

We took this comment to Harsha Vardhana Singh, who was a Deputy Director-General of the WTO until September of this year. Did he agree with Christos that bilateral trade deals might be a way round the failure of the Doha round?

We have not met the deadlines which were encompassed in the Doha negotiations, so ministers decided a couple of years ago that since it’s difficult to agree the whole package together, they would try to conclude some parts of it as and when they can be agreed.

At the ministerial conference in December in Bali, members are focusing on a narrower set of results in areas such as reducing trade costs through procedural improvements [as well as] looking at some aspects of agriculture which relate to the way tariff quota administration takes place, some concerns about food security, etc. There are also results in the area of development and some areas of interest to least developed economies.

So, those are the kind of things we are focusing on but it’s correct that the Doha round as a whole, as a bigger package, doesn’t seem to be possible to achieve right now. But the concerns which it encompasses will remain relevant…

So, when countries go into FTAs they should make sure they don’t create conditions that block the possibility of expansion to the multilateral level, because all these efforts will be brought back to the multilateral level one day, and that day is probably not that far in the future… Sustainable efforts require us to be multilateral, and the time will come when this multilateral process will start to be looked at much more seriously than it is today, and this is what I think we should hope for and work towards.

IMAGE CREDITS: CC / Wikipedia – fuzheado