my Trade Tripper column for this weekend issue of BusinessWorld:
The big news, of course, for 2013 so far as
trade is concerned was Bali. But after all the triumphalism has died
down, it would be good really to see what the significance of that Bali
package really is. The most apparent is that it buys time. In keeping
with the “bicycle theory” of international trade, the Bali Package keeps
the negotiations moving along in the hope something turns up in the
future.
The contents, though, seem impressive. It essentially consists
of 10 past agreements made at separate previous Ministerial Conferences
and covers the areas of food security, cotton, and preferential
treatment for poorer countries. It also contains provisions on the
lowering of tariffs and agricultural subsidies, the inclusion of which
nearly derailed the proceedings. Agriculture and provisions for the
least developed countries were considered among the “early harvest”
areas of a Bali Package.
It is, however, in the area of trade facilitation that Bali is hoping to
make its mark. “Trade facilitation” is essentially the easing of
customs rules in a country, so that the same will not serve as a
hindrance to trade. By having a uniform set of standards for customs
rules, so the theory goes, a country will need to improve its customs
procedures or, otherwise, not use the same to discriminate against
imports.
As the World Trade Organization (WTO) itself put it: “The new trade
rules that the Agreement introduces are aimed at streamlining customs
and port procedures. WTO Members have committed to implement new rules
of trade that will bring streamlined and more transparent customs rules
and procedures for traders.” An important aspect is greater customs
transparency, making publicly available information relating to
import/export procedures, duty rates and taxes, customs fees and
charges, and penalties and appeal procedures.
It also seeks to establish inquiry points to address questions by
governments and traders, provide an opportunity to review and comment
before rules enter into force, provide advance rulings on issues raised
by traders, streamline procedures to reduce times and costs,
post-clearance audits, E-payments of fees, risk management to reduce
physical inspection of entering cargo, expedited release of air
shipments, and improved procedures for perishable goods.
The foregoing looks good but when you really think about it, what is the
point? The Philippines could make all these improvements on its own,
without the need of an international multilateral agreement that binds
it up to other countries. Neither does it need the same really for
improving trade with other countries as most of its major trading
partners are richer countries anyway with quite developed and
transparent customs procedures. The only problem perhaps (due to
language issues) would be China (and conceivably, Japan). But both are
parties to the Philippines in regional trade deals (ASEAN-China, JPEPA,
and ASEAN-Japan), of which trade facilitation has already been included.
The World Customs Organization (WCO), for its part, seemed quite
(ironically) restrained in its welcome of the Bali Package: “The Dublin
Resolution, which was issued at the conclusion of the Policy Commission
meeting in Dublin, Ireland on 11 December 2013, welcomes the WTO
Agreement On Trade Facilitation (the “Trade Facilitation Agreement”), as
embodied in the Bali Package’s Ministerial Decision, adopted at the
WTO’s Ninth Ministerial Conference in Bali, Indonesia from 3 to 7
December 2013, under the framework of the Doha Development Agenda. The
Dublin Resolution emphasizes the commitment of the WCO to the efficient
implementation of the Trade Facilitation Agreement. The WCO Secretary
General, Kunio Mikuriya, said that he was very pleased with the timely
and affirmative action of Policy Commission, which reflects the
determination to drive forward the global Customs trade facilitation
agenda.”
Another thing that dampens any enthusiasm I have for Bali is that, even
assuming its contents really are a big step forward, the same needs to
be approved by each individual WTO member governments before it becomes
effective. In that regard, that India has an upcoming general election
this year and with US President Barack Obama still without a Trade
Promotion Authority (and with mid-term Congressional elections coming in
2014 that the Republicans are poised to gain advantages in) may even
lead to possible delays in any eventual actual application of the Bali
Package.
On the latter, though, points have been raised which trade lawyers may
find quite interesting. Cato’s Bill Watson says no TPP is needed. From
the IELP Blog: “Basically, his point is that Congress can, if it wants
to, vote up or down on a completed trade deal even without fast track,
so mucking up the process with fast track now doesn’t really add
anything.” An argument analyzed further by trade lawyer Ted Posner: “As
long as the executive confers informally with the legislature first, and
doesn’t push too far, it will maintain the ability to expand
international law on its own through sole executive agreements,
including as amendments to congressional-executive agreements.”
Your Trade Tripper will look more closely into the Bali Package in succeeding columns.
