The World Trade Organization, or WTO, announced its first ever global trade deal on Saturday, surmounting disagreements that dogged negotiations among ministers from 159 member nations who had gathered on the Indonesian island of Bali.
The historic agreement, which could contribute nearly $1 trillion to the world economy, cuts through red tape and streamlines customs and port procedures, and also makes it easier for the world’s poorest nations to export to richer markets. The breakthrough was achieved after Cuba withdrew a threat to veto the deal, as it does not help end a U.S. embargo on the Caribbean island nation, but later agreed on a compromise with the U.S.
“For the first time in our history, the WTO has truly delivered,” WTO chief Roberto Azevedo said, according to a Reuters report.
“This time the entire membership came together. We have put the ‘world’ back in World Trade Organization,” he said. “We’re back in business. ... Bali is just the beginning.”
The negotiations, which began on Tuesday, were stalled initially over India’s demand for a concession on food subsidies, as the country had recently announced a massive food security program aimed at providing government-subsidized grains to its poor. In the run up to general elections in 2014, India’s Trade Minister Anand Sharma insisted on a permanent exemption from WTO rules, but the final agreement promises a permanent solution for India’s demand within the next four years.
The first deal since WTO’s inception in 1995 is expected to create more than 20 million jobs worldwide, and also restore faith in the organization’s standing as an effective global partnership. The WTO’s achievement also evoked memories of talks in December 1993, when world nations agreed on the last global trade deal, which was for the creation of the WTO, according to Reuters.
“It is good for both developed and developing members alike,” U.S. Trade Representative Michael Froman said.
“Leaving Bali this week without an agreement would [have dealt] a debilitating blow to the WTO as a forum for multilateral negotiations,” Froman said earlier.
Although representatives from each member nation have agreed on the deal, it still needs approval from each member state’s government.