Simon Evenett - “Bali Was a Success Because It Wasn’t a Failure!”

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May 01, 2014
by Louise Hallman
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Simon Evenett - “Bali Was a Success Because It Wasn’t a Failure!”

St Gallen University professor and editor of “Building on Bali” explains what the WTO needs to do now to regain its centrality following the tepid success of the Bali Package  Simon Evenett speaking at the Salzburg Global Seminar program on New Dynamics in Global Trade

Simon Evenett is a professor of international trade and economic development at the University of St. Gallen, Switzerland, and co-director of the CEPR Program in International Trade and Regional Economics, the most established group of international trade economists in Europe. With Alejandro Jara he edited Building on Bali: A Work Programme for the WTO

At the 2014 Salzburg Global session New Dynamics in Global Trade Architecture: WTO, G20 and Regional Agreements, Evenett served as a resource specialist and answered questions from Salzburg Global Editor, Louise Hallman, on what he thinks the WTO should do now following the Bali Package.

Salzburg Global: In your book edited Building on Bali: A Work Programme for the WTO [provided as a key resource at the session] you said that Bali meant that the WTO had managed to avoid “abject failure”. What would this abject failure have been if Bali had not been a success?

Simon Evenett: If Bali had not been a success there would have been a serious loss of standing for the WTO. I think many more in the trade diplomatic community would have given up. There’s still a long way before the WTO restores its centrality in the system, and we have a lot of work to do restore faith in multilateral trade negotiations, but without Bali that process would not have started.

SGS: You also said that Bali “wasn’t a clear win”; so how much of a success really was Bali?

SE: Bali was a success because it wasn’t a failure! It wasn’t a major breakthrough in terms of improving national economies, resource allocation or policy making. There were some areas like in trade facilitation there will be improvements but nothing that is going to transform the world economy in the same way that the Uruguay Round laid the foundations for the trading system in the 1990s. I think that many people were pleased that the string of failures had been brought to an end but I think we’re all now a bit more cautious about what was accomplished at Bali. I think the headlines were great and I think it was excellent for the institution’s standing, but ultimately there’s a lot more work to be done.

SGS: So what is that work that needs to be done? 

SE: I think the diplomats have got to find a way to deal with many of the most important Doha Round issues and there will be a tendency to try and do something ambitious, but I think that tendency will be rejected and I think what we’re most likely to see is at most a string of small victories which will spread out over the next five years. I think that’s the most we can look forward to.

SGS: How much a threat do you think mega-regional trade agreements like the TPP and TTIP are to the centrality of the WTO? 

SE: There’s a good fraction of the trade diplomatic community that has still given up on the WTO and is pursuing these mega-regional deals. These people are not anti-WTO but they are sufficiently jaded about it and I think that group wants to see how far these mega-regional deals can go. I think they’re finding that concluding those big deals is very difficult – just like concluding Doha is very difficult. And so eventually, I think, those mega-regional deals will be seen in a slightly less positive light and people will then rethink engaging in Geneva but I think we’re two or three years away from that point, and in the interim the WTO is going to look like a poor orphan by comparison.

SGS: So what specific measures do you think the WTO should take now?

SE: Well, they have got to be faithful to the Trade Facilitation Deal. They have got to make sure that that gets implemented, reasonably on time and with the right support financially as well as the right commitments to developing countries. There’s plenty of room to play games with the implementation in the Trade Facilitation Deal and it will be interesting to see if that happens, and if it does it’s going to send a very bad signal. 

Then the second thing they have got to work on is some of the outstanding issues which were of greatest interest to probably the least developed countries – duty free, quota free market access, something on cost of subsidies, maybe something on export subsidies on agriculture – and these are not easy issues for some of the industrialized countries to deal with. But I think these issues are going to be put on a totem pole and people are going to benchmark the WTO’s progress against them. 

SGS: Next year marks 20 years since the WTO itself was formed; what do you see as the long-term future of the WTO?

SE: I think the long-term future of the WTO depends on the answer to one question: Are governments prepared to reform using binding legal trade accords? Governments are clearly prepared to reform – we’ve seen a lot of that over the last few years – but whether they’re prepared to tie their hands or tie themselves with legally binding agreements is really open to question. I think we may be negatively surprised by the answer to that question. If governments are not really prepared to use legally binding trade agreements in the future then it’s very hard to see what role the WTO can play in the coming decades. So everything turns on that question.


Simon Evenett was the resource specialist for the Salzburg Global program New Dynamics in Global Trade Architecture: WTO, G20 and Regional Agreements, which was supported by the KDI School of Public Policy and Management. More information on the session can be found here: www.salzburgglobal.org/go/533