Nov 27, 2014 1:23 PM

Diplomats make trade deal to cut red tape, poverty

The Associated Press

GENEVA (AP) After many years of talking, the World Trade Organization pulled off a major deal Thursday that the body said could boost global commerce by $1 trillion annually.

Diplomats said the deal is the first multilateral trade agreement in the organization's 20-year history. Agreement has been difficult to reach because WTO deals require the unanimous backing of its 160 member countries.

"Once in force, it will help developing countries better integrate into the global economy, intensify regional integration and lift millions out of poverty," said European Union Trade Commissioner Cecilia Malmstrom.

WTO Director-General Roberto Azevedo said the deal is now operational but will come into force once two-thirds of the members have officially accepted it.

"This is a very important moment for the WTO," said Azevedo. "We have put ourselves back in the game. We have put our negotiating work back on track."

After months of stalemate and years of negotiation, a U.S.-India deal this month over food stockpiling by India cleared the way for the agreement. India had insisted on subsidizing grains under a national policy to support hundreds of millions of impoverished farmers and provide food security amid high inflation, a stand that had blocked the talks since July.

Critics worry that the agreement could make it harder for countries to set their own priorities on environmental and labor protections, food security and other trade-related issues. The WTO has said, however, that the Trade Facilitation Agreement could increase total world trade to $23 trillion from its current estimate of $22 trillion.

U.S. Trade Representative Michael Froman said the WTO "has taken a critical step forward." The deal "has the potential to fundamentally reform global customs practices and substantially reduce the costs and time associated with goods crossing borders," he said.

The deal covers only a small part of the areas on which the WTO launched a trade round in Doha, Qatar, in 2001, with the initial plan of completing it in three years. It soon proved impossible to meet that timeframe or to agree on all the topics in the original program.

As the years dragged by and the organization's members continued to disagree on fundamentals, many observers considered that the WTO was losing its relevance and that countries would be better off concentrating on bilateral trade deals. Malmstrom said this deal puts the WTO "back in business."

"Members have shown the willingness to compromise and a real commitment to the multilateral trading system," said Azevedo. "It has been a tough period for our negotiating work, but we have got the right result today."


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