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The Ninth Ministerial Conference of the World Trade
Organization (WTO) concluded on Saturday, 7 December 2013. The outcome of the
conference in Bali helped ease the growing sense of frustration after years of
WTO meetings had failed to produce meaningful agreements. Since the launch of
the Doha Round in 2001 in Doha, negotiations had made little progress.
The beauty and warm atmosphere of Bali seemed to
encourage delegates to engage in mutual compromise, ultimately leading to
agreement. The outcome of the WTO Conference in Bali, known as the Bali
Package, was warmly welcomed by participating countries with diverse economic
development ideologies.
The Doha Round, also referred to as the Doha Development
Agenda, was intended to establish a single set of rules applicable to 159 WTO
member countries in various areas, such as reducing import tariffs, cutting
trade-distorting agricultural subsidies, and creating standardized customs
procedures. With uniform rules agreed upon and implemented, the movement of
goods across borders was expected to become smoother and global trade to grow
more rapidly. The underlying premise of the Doha Round was that if all countries
adhered to the same trade rules, all—both developed and developing
nations—would benefit. Expanding trade was expected to generate more business
opportunities and create broader employment prospects.
In practice, however, many countries felt that freer
trade had not delivered the expected benefits. Although trade volumes and
values increased significantly, the distribution of its benefits was widely
perceived as inequitable. This issue of fairness became a central source of
criticism voiced by many groups outside WTO conference halls. In his opening
remarks at the Bali Conference, the President of Indonesia emphasized the need
for trade that ensures fairness for all.
The issue of fairness had long been a major obstacle to
reaching agreements in previous WTO conferences and may continue to be so in
the future. The lack of significant progress in the Doha negotiations prompted
many countries to pursue bilateral and regional trade agreements, such as the Trans-Pacific
Partnership and various free trade arrangements between the United States and
the European Union. Therefore, the agreement reached at the Bali Conference was
viewed as an important milestone in advancing the Doha Development Agenda and
preserving the WTO’s relevance as a multilateral trade institution.
The Bali Package consists of ten documents covering trade
facilitation, agriculture, and development issues. It provides policy space and
flexibility for developing countries to manage their food security programs.
For Indonesia, the Bali Package does not hinder ongoing food security and
agricultural development policies. The maximum subsidy of 10 percent of total
food production for public stockholding—one of the most debated issues in
Bali—has never been exceeded by Indonesia. Improvements in customs procedures
outlined in the Bali Package have also long been part of Indonesia’s reform
agenda, aimed not only at facilitating trade flows but also at reducing
corruption and illegal levies in customs administration.
The Indonesian government remains firm in positioning
agriculture as a strategic sector in national development. Agriculture
continues to provide livelihoods for the majority of Indonesia’s workforce, and
many farmers still require improved living standards. Indonesia has also
experienced the adverse effects of sharp food price spikes, which reduce
purchasing power, fuel inflation, and create social and political tensions.
Increasingly unpredictable climate conditions heighten production and price
risks, making Indonesia’s food security vulnerable if it relies solely on
international markets.
Maintaining national food stocks is therefore
essential—not only for food security but also for poverty alleviation programs
and disaster response. These considerations have consistently shaped
Indonesia’s stance in WTO forums. At the Bali Conference, Indonesia, together
with other developing countries, continued to advocate for agricultural
subsidies.
For Indonesia, the Bali Package is not the end but the
beginning of stronger efforts to enhance agricultural competitiveness, national
food security, and farmers’ welfare. Price subsidies and support measures are
short-term policies that can boost production and farmers’ incomes. However,
they are often unsustainable and may create new inequities due to poor
targeting. Price-based policies frequently face budgetary and timing
constraints, reducing their effectiveness. They may also create conflicts between
producers and consumers: raising prices to support farmers can increase
consumer prices, while lowering consumer prices may depress farm-gate prices.
Sustainable agricultural development depends on policies
that consistently improve farmers’ welfare. Investments in rural
infrastructure, irrigation, marketing institutions, access to inputs, land and
capital, improved seeds, and better cultivation techniques are essential public
responsibilities. Governments at all levels must ensure steady growth in
agricultural productivity. Agricultural expansion should not rely solely on
land in Java; crop breeding and agro-ecology–appropriate technologies are needed
across regions.
While price and subsidy policies tend to show quicker
results and are widely used globally, they can distort markets and have
socioeconomic drawbacks. In contrast, non-price policies—such as irrigation,
institutional reform, and technological innovation—require long-term
consistency and persistence before tangible results are realized. Indonesia’s
challenge lies in maintaining such consistency across administrations and
generations.
The journey of the Doha Round, of which the Bali Package
is a part, is likely to remain lengthy and uncertain. Nevertheless, efforts to
improve farmers’ welfare must continue and cannot wait for the conclusion of
the Doha negotiations.
Agriculture was arguably the central issue at the Bali
Ministerial Conference, particularly the proposal of the G-33 group concerning
public stockholding for food security and flexibility in subsidies for poor
farmers. Developed countries engaged in discussions on one of the three core
agricultural negotiation pillars: domestic support (the other two being market
access and export subsidies).
The success of the G-33 in securing a “peace clause” in
the Bali Package was significant. While not a permanent solution, it allowed
developing countries temporary protection. Under this clause, developing
countries providing domestic support beyond the 10 percent ceiling agreed upon
in the Uruguay Round (1986–1994) would not be challenged under the WTO dispute
settlement mechanism for a limited period.
Although concerns were raised about potential market
distortions—particularly if public food stocks inadvertently entered
international markets—the agreement provides Indonesia with safeguards. It
helps ensure that subsidy policies of other countries, such as Malaysia’s
Bernas and India’s Food Corporation, do not distort Indonesia’s domestic market
or undermine its food security policies. At the same time, it provides
Indonesia with policy space to maintain subsidies, provided they do not distort
other countries’ markets.
Resources:
1. Thehe
WTO Bali Package and Its Relevance to Indonesian Agriculture
By Harianto, Special Staff to the President of the Republic of Indonesia for
Food and Energy
(http://www.setkab.go.id/artikel-11423-paket-bali-wto-dan-relevansinya-bagi-pertanian-indonesia.html)
2. The
Bali Package and Its Benefits for Indonesia
By Iman Pambagyo (Kompas, January 10, page 7)
#BaliPackageWTO
#IndonesianAgriculture
#FoodSecurity
#AgriculturalSubsidies
#InternationalTrade
