In December 2013, at the Ninth WTO Ministerial Conference, the ministerial decision to adopt the Bali Package was declared. The Bali Package involved “a series of decisions aimed at streamlining trade, allowing developing countries more options for providing food security, boosting least-developed countries’ trade and helping development more generally.” (World Trade Organization) It was positioned as an agreement that “finally helped developing countries” (The Guardian) by implementing a strategy to aid developing nations in growth opportunities.
An aspect of the Bali Package that could impact Canada is the provision surrounding global trade. The package will aim to increase global trade and impact the global economy. It seeks to not only benefit developed nations trading capacities, but to increase the trade capacity of developing nations, specifically in the agriculture sector.
Could the Bali Package strengthen the trading capacity of developing nation’s agricultural sector and subsequently create new trading channels for other agriculturally dense regions, such as Alberta? Although the direct impact of the Bali Package on Alberta and Canada’s agricultural industry won’t be evident until the policies are established, the Canadian Agri-food Trade Alliance (CAFTA) welcomed the trade provisions outlined in the package. CAFTA notes that the current agri-trade landscape is currently restricted by “market access restrictions including tariffs and quotas, trade distorting domestic support, export subsidies, differential export taxes, tariff escalation, and non-tariff barriers” and that the Bali Package could create “greater transparency and common disciplines in key areas such as customs rules and test procedures and new obligations around the treatment of perishable goods will help facilitate trade and reduce the costs incurred by Canadian exporters.” (CAFTA)
The decisions made at the Ninth TWO Ministerial Conference could potentially benefit Alberta and Canada’s agricultural industry by reducing both tariff and non-tariff barriers to agri-trade. In addition, by simplifying customs bureaucratic procedures, countries could experience a decrease in tariffs and transaction costs. Streamlining the trade process could incentivize countries to trade; however it could have an adverse effect on countries reliant on import tariffs for revenue.
Although the Bali Package is positioned to increase trade facilitation, its true effect on trade is uncertain. With developed nations increasingly closing trade boarders following the financial crisis in 2008, south-south trade increased significantly, reaching US$4.7 trillion in 2013. (UNCTAD) While developing nations supplemented lost revenue associated with increased protectionism, developing countries still lag behind their counterparts in terms of market share of exports.
With the Bali Package facilitating trade and decreasing transaction costs, will the trading profiles of developing nations grow to mirror that of developed nations?
Fig.1 Market Shares of Developing and Developed Economies’ Exports of Selected Services (%)