WTO Reaches Historic Trade Facilitation Deal in Bali 


December 2013

International Trade Bulletin
Jonathan O'Hara, Mehdi Hakimi, Student at Law
The World Trade Organization (WTO) has reached its first ever major global reform deal since the organization was established in 1995. On December 7, 2013, the WTO's 159 ministers voted to accept the package, which could add up to USD $1 trillion to the global economy, including by facilitating trade through clarified and improved customs practices.

The Bali Package focuses on two broad categories of issues. The first part deals with trade facilitation (via customs reform), agriculture, cotton, development and issues pertaining to the least-developed countries. The second part adopts five decisions of the WTO's ministers regarding the General Council's work.

In terms of trade facilitation, the Bali Package aims to cut red tape and speed up port clearances. The trade facilitation component will be a legally binding agreement. Specific customs related obligations that have been improved or clarified include:

  • Prompt publication and availability of information such as importation, exportation and transit procedures, rates of duties and taxes, and laws and regulations in an easily accessible manner;

  • Providing opportunities to traders and other interested parties to comment on the proposed introduction or amendment of laws and regulations related to the movement, release and clearance of goods;

  • Rights to appeal or review administrative customs decisions;

  • Disciplines on fees and charges imposed on or in connection with importation and exportation;

  • Obligations relating to the release and clearance of goods such as establishing procedures for the processing of import documentation prior to the arrival of goods; and 

  • Measures designed to improve the freedom of transit such as prohibitions against transit regulations.

These clarifications and improvements should benefit Canadian businesses with significant export components, especially ones who export to a wide array of countries and who have encountered difficulties or delays with international shipments and customs clearance of their products.

The Bali Package also includes a political commitment to reduce export subsidies in agriculture and keep them at low levels, and to reduce obstacles to trade when agricultural products are imported through quotas.

The Bali Package also adopts five decisions of WTO's ministers in certain key areas, as part of WTO's regular work under the General Council. First, in intellectual property, members agreed not to bring "non-violation" cases to the WTO dispute settlement process. Second, in electronic commerce, members agreed not to charge import duties on electronic transmissions. Third, the ministers decided to give special consideration to issues of small economies. Fourth, the ministers reaffirmed their commitment to Aid for Trade, an initiative that assists developing countries, and in particular the least developed countries, trade. Fifth, the ministers directed their Geneva delegations to continue examining the link between trade and transfer of technology and make possible recommendations on steps that might be taken to increase flows of technology to developing countries.

Quite apart from the content of the Bali Package, perhaps the most significant aspect of the deal is that it happened at all. The Bali Ministerial Conference was nearly derailed when Cuba refused to accept a deal that would not help open the US embargo against it. India had also been an obstacle because of its vociferous objections to provisions that might endanger grain subsidies.

The fact that a deal was made despite these obstacles may rekindle confidence in WTO's ability to further lower barriers to trade at a global, multilateral level. This is particularly important given the increase of bilateral and regional trade negotiations undertaken after little apparent progress in the Doha Round since it started 12 years ago. The Bali Package shows that the Doha talks are not completely dead and, more importantly, that it is possible for WTO members to agree on global trade issues. 

a by Martin Masse, Jonathan O'Hara and Mehdi Hakimi, Student at Law

a cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2013