How Will Bali Package Benefit Indonesia?

Even in the midst of the massive pessimism toward the Bali Package trade deal, which came out of the World Trade Organization (WTO)’s Ministerial Conference in Bali early this December, we have to admit that the policy does represent good initial progress. Progress, that is, for the WTO as an international organization whose Ministerial Conference has, in the past, often failed entirely to reach a consensus; progress for the multilateral trading system that has divided the world into a wealthy Northern bloc and a poorer Southern bloc; and progress for the Doha Round trade talks, which have been “dying” for 12 years. But still, there is an urgent question yet to be answered; that is whether the Bali Package also represents progress of the Indonesian state’s effort to bolster the welfare of its people.

Indonesian Minister of Trade Gita Wirjawan has stated that the Bali Package is geared towards the interests of the least developed countries and is a realistic step towards fulfilling the promises of the Doha Round. On paper, the Bali Package’s three main points of trade facilitation, agricultural development, and capacity building in the least developed countries, sound ideal and profitable. Although, in the past, the developed countries of the North opposed such initiatives, the Bali Package has, at long last, successfully challenged the least developed countries to provide more subsidies for local farmers, thus increasing the amount of food stockholding as well as solidifying the food security of the nation. At the same time, the Bali Package also simplifies the accepted rules of origin making the export of products to other countries easier and more profitable. It even commits the more developed countries to assist in implementing these reforms so that the products of the least developed countries are able to compete in the global marketplace. In short, the Bali package is the WTO’s effort to reach a fair and balanced global trade so that the interests of all members can be met. But is it really?

In order to determine whether or not the Bali Package will truly be of benefit to Indonesia there are other factors to consider. For example, the so-called “Four-Year Peace Clause” that has served as an interim solution for the food subsidies issue. There is, understandably, a lot of pessimism surrounding this point, which was raised by a bloc of the world’s most developed countries. This is partly because four years is not long enough to firmly establish the health of the agricultural sector in many of the world’s least developed countries, but mainly, because it was a temporary solution. What would happen after the “four years” had elapsed? Would local farmers be “tortured” by the deep cut to agricultural subsidies proposed by the developed countries again? How then is the WTO seeking a permanent solution to the issue that continues to be a wedge between the world’s most and least developed countries?

This paper is intended to be a reminder that the Bali Package still has loopholes and weaknesses. It’s these flaws that have triggered recent protests. It’s these flaws that the Indonesian Government must be aware of if it really wants to succeed with the WTO’s new policies for the sake of Indonesian citizens. Amidst the fears and doubts surrounding the Bali Package’s implementation, there is the comforting fact that the WTO as an organization adheres to the principle that its efforts can and should accommodate the interests of all parties. The voice of one country can determine the success or failure of the policy formulation process. So just in case the Bali Package doesn’t live up to expectations, Indonesia can urge the WTO to take another track by formulating alternative policies that will pay the expensive tab for the Bali Package’s failures. We can do that, right?

photo credit: Marco Bellucci via photopin cc

About Ika 12 Articles
Ika Virginaputri is an independent writer and current-affairs observer for the Dekker Center. She lives in Jakarta and writing for the Dekker Center and national and international media.

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