W.T.O. Reaches First Global Trade Deal

http://www.nytimes.com/2013/12/08/business/international/wto-reaches-first-global-trade-deal.html

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NUSA DUA, Indonesia — The World Trade Organization reached its first trade reform deal on Saturday to a roar of approval from nearly 160 ministers on the Indonesian island of Bali who had decided on the agreement, which could add $1 trillion to the global economy.

The approval came after Cuba backed off from a threat to veto the package of measures.

The talks, which began on Tuesday, nearly derailed when Cuba refused to accept a deal that would not help open the United States embargo of the Caribbean island. That forced negotiations into Saturday morning.

Cuba later agreed on a compromise with the United States.

But there was skepticism on how much the deal had achieved.

“Dealing with the fracas on food security sucked the oxygen out of the rest of the talks,” said Simon J. Evenett, professor of international trade at the University of St. Gallen in Switzerland.

The talks began under a cloud because of India’s insistence that it would back an agreement only if there was a compromise on food subsidies because of its huge program for stockpiling food to feed its poor.

An eventual compromise was welcomed by India’s trade minister, Anand Sharma. While India had insisted on a permanent exemption from the W.T.O. rules, the final text aimed to recommend a permanent solution within four years.

The agreement is a milestone for the 159 members of the W.T.O., which was created in 1995.

It rescues the W.T.O. from the brink of failure and will rekindle confidence in its ability to lower barriers to trade worldwide after 12 years of fruitless negotiations.

The deal would speed the passage of goods through customs. Analysts estimate that it could eventually bolster the world economy by billions of dollars and create more than 20 million jobs, mostly in developing countries.

It still requires the approval of each member government.