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The Bali Package

The WTO’s Ninth Ministerial Conference, held in Bali at the end of 2013, concluded with ministers approving the “Bali Package”, a selection of issues from the broader Doha Round negotiations. The Package consists of ten decisions/declarations covering trade facilitation, agriculture and development. A Ministerial Declaration called for a clearly defined work programme on the remaining Doha Development Agenda issues to be concluded by the end of 2014

Trade Facilitation Agreement

Objective of the Trade Facilitation Agreement

The Agreement aims to expedite the movement, release and clearance of goods, including goods in transit.

 

Major gains

The Agreement on Trade Facilitation (TF) is expected to provide a significant boost to the global economy. It could reduce the costs of trade by up to 10 per cent in advanced economies and by 13-15 per cent in developing economies, thereby also lowering costs for consumers.

 The gains resulting from the Agreement include:

  • more information, more transparency and less bureaucracy
  • increased participation of small and medium-sized enterprises (SMEs) in global trade
  • increased possibilities for countries to participate in "global production chains"
  • more and better customs cooperation
  • creating a stable, more transparent business environment and attracting foreign investment
  • better allocation of scarce resources
  • making transit of goods easier and faster (this is of particular interest for landlocked countries).

 

Main principles

More transparency

There will be more transparency as a result of:

  • prompt publication of rules related to trade and customs
  • better exchange of information between traders and government authorities through enquiry points
  • the possibility for traders to comment on any legislation related to the movement of goods
  • regular consultations between border agencies and traders.

More expeditious border clearance procedures, fewer fees and formalities connected with importation and exportation

The improved procedures include:

  • enhanced rules on fees and charges imposed on imports/exports
  • processing import documents before goods arrive at customs
  • electronic payment of duties and taxes
  • release of goods before final customs duties are determined, provided that their payment is made in advance or guaranteed
  • conduct of customs control following the release of a cargo to ensure compliance with customs rules (post-clearance audits)
  • publication of average time taken by customs to release goods
  • additional trade facilitation measures for some traders identified on the basis of specific criteria (authorized operators)
  • facilitating urgent deliveries while maintaining customs control
  • specific provisions on perishable goods
  • reduced formalities, such as use of international standards in designing import/export/transit procedures or a single window for traders to submit paper work
  • making transit of goods easier and faster, with improved freedom of transit
  • pre-arrival processing
  • establishing similar working days/hours, procedures and formalities for those connected with  importation and exportation
  • joint facilities and controls
  • one-stop border post control
  • setting up common customs procedures and uniform documents, if possible.

Customs cooperation

There will be improved customs cooperation through:

  • the exchange of certain customs information. 

Creation of a permanent WTO Committee on Trade Facilitation

A permanent Committee on Trade Facilitation will be created to ensure the smooth implementation of the Agreement. Until it starts its operation, a Preparatory Committee has been formed. The role of the committee is to conduct a legal review, to draft a protocol to amend the Marrakesh Agreement establishing the WTO by inserting the new Trade Facilitation Agreement and to receive notifications of the parts of the agreement that WTO members will be able to implement upon entry into force of the Agreement.

 

Special provisions for developing and least-developed countries

The Agreement contains far-reaching flexibilities for developing and least-developed members. They will be able to self-determine, on an individual basis, when to implement its provisions, and are entitled to significant implementation support. The Agreement ensures that those countries will not be obliged to implement commitments they do not yet have the capacity to put into practice. The specific flexibilities are not limited to transition periods but include a wide array of additional special and differential treatment provisions. 

 

Implementation of the Trade Facilitation Agreement

The Agreement will enter into force once two-thirds of all WTO members have ratified it. The Agreement will become an amendment to the Uruguay Round Final Act through a Protocol.

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Trade facilitation

 

Agriculture

On agriculture, the Bali Ministerial Conference produced a political commitment to reduce export subsidies in agriculture and keep them at low levels, a decision to reduce obstacles to trade when agricultural products are imported through quotas, and decisions to provide some reassurance for developing countries that they will not be challenged legally when they buy food at government-supported prices in order to stock it for food security and when they provide some government services. These topics were chosen because they were seen to be easier for negotiators to agree on — members have now pledged to try to settle the rest of the much larger agricultural package on the Doha Round table.

 

Export subsidies (in the broadest sense)

In Bali, ministers issued one of the strongest statements of intent that has ever been made on reining in export subsidies, which some see as the worst distortion of agricultural trade. They pledged to “exercise utmost restraint” in using any form of export subsidy, including subsidies in export credit and insurance, food aid and exporting state enterprises.

They repeated their 2005 commitment to eliminate all forms of export subsidies — but that will have to wait until the Doha Round as a whole is agreed. In the meantime, they will strive to keep actual subsidies well below the permitted levels, with disciplines applying to export policies that may have the same effect as subsidies — these policies are known collectively as “export competition”.

The declaration is explained here, and the most recent developments on implementing this in the Agriculture Committee are here,

 

Developing countries’ public stockholding for food security

In Bali, ministers agreed to shield public stockholding programmes for food security in developing countries so that they would not be challenged legally even if a country’s agreed limits for trade-distorting domestic support were breached.

A number of developing countries say that the way the support is calculated means they are finding it more and more difficult to stay within their limits, particularly when their stockpiling involves buying at supported prices and includes supplying the stocked produce to low-income consumers.

The Bali decision means countries will not face a legal challenge provided they meet certain conditions such as ensuring the programmes do not harm other countries and providing up-to-date information on their support programmes. It is an “interim” decision that will be in force until a permanent decision replaces it — the target date being 2017.

The decision is explained here, and the latest developments related to it in the Agriculture Committee are here.

 

Improved management of tariff quotas

A third decision aims to reduce obstacles to trade when agricultural products are imported through quotas of a particular type: “tariff quotas” or “tariff-rate quotas” (TRQs), the only kind normally allowed in agriculture, where the import duty on quantities inside the quota are lower than on quantities outside.

Some countries are concerned that the methods governments use to share these quotas among traders (“TRQ administration”) can become an additional trade barrier. Evidence of this, they say, is when parts or all of the quotas are not used (they are “under-filled”), although importing countries usually say the under-fill is caused by other reasons.

The Bali decision says that if a quota is persistently under-filled — and information-sharing and consultations prove fruitless — the importing government would have to apply one of a prescribed set of methods for administering quotas aimed at removing impediments.

The decision is explained here, and the latest development in the Agriculture Committee is here — the committee does not have to act until a delegation cites the decision to query an under-filled quota.

 

General services

The fourth Bali decision on agriculture adds some development and land-use programmes to the list of general services that are candidates for being allowed without limit because they cause little trade distortion.

The decision is explained here. (The Agriculture Committee has not needed to take any further action on it.)

 

Development

The Bali conference took a series of decisions on development issues. These include a specific package for the least-developed countries, a mechanism to review and strengthen favourable treatment for developing countries and a decision to reaffirm the commitment to reform world cotton trade.

 

Decisions on least-developed countries

Three decisions adopted at Bali represent a significant step towards the better integration of least-developed countries (LDCs) into the multilateral trading system.

Ministers reaffirmed the commitment to an LDCs services waiver, a 2011 decision that enables developed and developing members to provide preferential treatment to services and service suppliers from LDCs. To put the services waiver into action, the Bali decision lays out specific steps to ensure meaningful benefits for service suppliers from LDCs. Members are also encouraged to extend preferences to LDCs' services under their own initiative and provide technical assistance to strengthen the LDCs' capacity to export services.

The second decision includes guidelines to simplify preferential rules of origin. The Bali decision contains some illustrations of how to simplify rules of origin for the poorest countries and to make them as transparent, simple and objective as possible.  The Committee on Rules of Origin is to annually review the developments in the context of these guidelines.

The third decision calls on members to improve their existing duty-free and quota-free (DFQF) access to LDC products prior to the next Ministerial Conference in 2015. The decision brings enhanced transparency in the implementation of market access for LDC products. The WTO Secretariat is to annually prepare a report on members' DFQF access for the LDCs at the tariff line level.  

Find out more:

Briefing note on LDC decisions at Bali Ministerial Conference

 

Monitoring Mechanism on Special and Differential Treatment

The Bali Conference adopted the scope, functions, and terms of reference and operations of the Monitoring Mechanism on Special and Differential Treatment (S&D) which had been earlier established by the July General Council Decision of 2002.

S&D provisions contained in multilateral WTO agreements and in Ministerial and General Council decisions aim to provide flexibility to developing countries and LDCs so that they can more easily integrate into the multilateral trading system. The Mechanism will provide members with an opportunity to review and analyse the utilization of S&D, including all aspects of the implementation. The review can result in recommendations to the relevant WTO bodies, with the aim of either strengthening implementation of S&D or of the provisions themselves.

The Committee on Trade and Development will hold two meetings, under the umbrella of dedicated sessions, to operate the Mechanism.  Any member can submit written inputs or submissions, which will be the basis of the review.

Find out more:

Briefing note on Monitoring Mechanism

Special and differential treatment provisions

 

Cotton

Ministers in Bali reaffirmed their commitment to reform world cotton trade and to increase members’ work towards the reform. Based on a proposal that the Cotton-4 countries — Benin, Burkina Faso, Chad and Mali — submitted in October 2013, the decision focuses on both the trade and development aspects of the cotton issue.

The decision reiterates WTO members’ commitment to “on-going dialogue and engagement” to make progress in the negotiations on cotton. It requires members to meet twice each year to study the latest information and to discuss the latest developments on market access, domestic support and export subsidies for cotton, particularly from LDCs. These sessions will come under the agriculture negotiations.

Ministers in Bali also committed to continued engagement in the Director-General’s Consultative Framework Mechanism on Cotton to strengthen the cotton sector in the LDCs.

Find out more:

Briefing note on cotton at Bali Ministerial Conference