Trade ministers open their meeting in Bali Tuesday with the aim of creating a new multilateral trade reform package worth more than $100 billion to the global economy. The deal — focusing on measures to cut red tape at borders — would be a welcome shot in the arm for both global trade and for the World Trade Organization itself.
This may come as a surprise to some. Indeed, you could be forgiven for thinking that the Doha Round of multilateral trade negotiations had quietly died after a 10-year struggle. But in fact, work has continued in the World Trade Organization — and in capitals around the world — to capture some of the gains from what was once billed as the most ambitious trade round ever. The first multilateral trade agreement in almost 20 years now stands tantalizingly within reach.
The package on the table in Bali includes important provisions on agriculture and development, which would give greater transparency and additional safeguards for international trade. Top billing should go to “trade facilitation” reforms that would streamline border and customs procedures the world over.
That might sound strange. After all, customs regulation is hardly a topic to get pulses racing. But the importance of this agenda is apparent when you realise that around 7 percent of the value of global trade is eaten up by unnecessary bureaucracy at borders.
Consider the time it takes to get goods through customs. Clearance times of two weeks are regrettably par for the course in many parts of the world. It’s not uncommon to hear from businesses struggling with the consequences of having goods stuck in customs for many months.