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WTO slammed

Christian Ignatzi / bkDecember 9, 2013

Politicians and business leaders around the globe are celebrating a breakthrough for a world trade deal hammered out at the WTO conference in Bali. Despite all the plaudits, however, non-goverment groups are skeptical.

WTO Konferenz auf Bali 2013

Politicians everywhere have welcomed the package of trade facilitations agreed to by members of the World Trade Organization at their meeting on the Indonesian island of Bali. President of the European Commission, Jose Manuel Barroso, spoke of a "real boost to the global economy," predicting yields of up to a trillion dollars more for the world economy.

"This is good news for the German export industry, too," added Germany's soon-to-be-replaced Economics Minister Philipp Rösler, before insisting that the populations of all countries would benefit, including those in the developing world.

Indian Trade Minister Anand Sharma called the Bali deal a victory for India's farmers and impoverished people everywhere. "An alliance of developing countries formed during the talks, which withstood pressure and demonstrated solidarity," he said. India managed to win special exemptions for agricultural subsidies so as to provide enough staple food for its population.

German Economics Minister Philipp Rösler
The German economics minister welcomed the Bali packageImage: Nigel Treblin/Getty Images

Business expecting major profits

There was also a celebratory mood among the representatives of the business world as well. The International Chamber of Commerce (ICC) called it a "historic agreement." The streamlining of customs clearing alone, it said, would save up to 15 percent of the costs of cross-border trade worldwide. It also estimated that the boost to growth caused by the Bali agreement could create 21 million new jobs - mostly in the developing world.

But, industrialized countries, like Germany, will also benefit from the agreement. Volker Treier, head of exports at the German Chambers of Commerce and Industry (DIHK), said that Bali had sent out the "right and the important signal." The German economy, he estimated, could now expect growth of 60 billion euros ($82 billion) over the next five years.

Boost to world trade

The US Chamber of Commerce underlined the importance of the agreements to the WTO itself. "The WTO has re-established its credibility as an indispensable forum for trade negotiations," it said in a statement released in Washington. The facilitation of cross-border trade through the reduction in bureaucracy would give the world economy a boost, the statement continued.

"What we have done here in Bali is really something special," Indonesian Trade Minister Gita Wirjawan said at the conclusion of the WTO conference. "We have sealed a package that brings with it a stable food supplies for billions of the poorest people in the world. We have brought trade facilitation that will pump up to a trillion dollars into the global economy. And we have agreed to a whole series of groundbreaking initiatives that will help developing countries profit from the multilateral trade system."

Criticism from NGOs

But, many non-governmental organizations harbor doubts about this last point, in particular. The German church-affiliated NGO aid organization "Brot für die Welt" (Bread for the World) sees the Bali deal as curbing, rather than furthering, the interests of developing nations. One point it criticized was the fact that only India had secured exemptions for agricultural subsidies. "It is hard to understand why no other country is allowed to implement comprehensive state measures to support small farmers and fight hunger," the NGO said in a statement. The Bali agreement showed "that the WTO is the wrong framework to agree on global regulations to secure food supplies."

Anti-WTO demonstrator in Bali
The talks attracted a lot of criticism from NGOsImage: Reuters

Biraj Patnaik of the Indian aid network Right to Food Campaign also described the compromises as inadequate, saying that the decision to limit subsidies to India was a "declaration of bankruptcy for free trade."


The German branch of anti-globalization network, Attac, was similarly scathing, calling the Bali package a "disaster for a fair world trade order." Alexis Passadakis, who followed the talks in Bali for Attac, said, "Despite the many compromise formulas, the deal is mainly good for the export interests of northern states, particularly in the way it simplifies customs."

International aid organization Oxfam was more generous, praising the agreement as at least providing "breathing space" for the poorest countries, but underlined that the package contained no groundbreaking changes. The advantages, it said, were seriously overestimated, while the costs of implementation to poorer nations had been completely ignored.