If it has been accepted since Gleneagles that Africans should determine their own future (Promise of aid, 13 June), then why has the EU has been trying to impose on them for more than 10 years a trade deal which is not in their interest? Instead of responding to the concerns raised, two months ago Europe said: take the deal or lose your preferential access to the EU. For African countries, the message seems to be: supply us with your raw materials, give us access to your vast natural resources, allow us to cater to your consumers – we'll even throw in a bit of aid to ensure that our subsided goods cross the region's borders more quickly.

This is all too familiar. Trade is the elephant in the room. Make Poverty History failed to persuade the G8 to deliver anything meaningful on trade, and the 2013 G8 leadership is ignoring the role of trade for development. Having moved far beyond discussions of imports and exports, bilateral trade deals are now determining who gets what piece of the global value chain. Change will come from African leaders who will ensure that regional trade, contributing to domestic development, comes before any trade deal with G8 countries.
Paul Spray
Director, policy and programmes,
Traidcraft, Gateshead

• G8 leaders must find a solution to the Syria crisis when they meet in Northern Ireland next week (Report, 14 June). Instead of fanning the flames of the conflict by sending more weapons to Syria and risking an arms race, leaders should be prioritising the pursuit of a political solution and making the proposed Geneva peace conference a reality. A staggering 5,000 people a month are dying. More than 8 million people are in need of humanitarian aid, many out of reach of help because of the fighting. Sending more arms to either side will only increase the bloodshed.

When Presidents Obama and Putin meet at the G8 they will have an opportunity to make the Geneva conference a reality and have a genuine impact on the lives of ordinary Syrians.
Mark Goldring
Chief executive, Oxfam

• Colombia is a country rich in natural resources but we are aware of the increasing need the world has for energy and raw materials. The recent mining boom here has brought with it a web of payments (Report, 12 June) to government and local authorities that are difficult to trace and often bring no benefits to the local communities.

My country has already suffered from more than 50 years of conflict. The secrecy surrounding mining deals creates more uncertainty, especially in the most vulnerable communities whose lands and homes are often under threat and who continue to live in poverty despite the enormous wealth of resources around them.

The EU's new transparency legislation, requiring extractive companies to publish details of payments they make to national governments is a great victory, not just for our communities but for civil society partners such as Cafod which fought to deliver it. Transparency can now become a tool in fighting for justice, reducing conflict and offering a more stable environment for business.

We now need the G8 leaders to go further and make progress towards a global standard on transparency in the extractives sector. Only effective legislation of this industry can start our journey of hope to flourish as a people and a nation.
Hector Fabio
Director, Caritas Colombia, Bogota, Colombia

• Congratulations to the UK for taking the lead in urging the G8 to tackle the growth of antibiotic-resistant bacteria (Report, 12 June). We urge the G8 to recognise the need to phase out the regular prophylactic use of antibiotics in healthy animals and to minimise the use of those antibiotics classified by the World Health Organisation as "critically important" for human medicine. Instead, disease should be prevented by good hygiene, husbandry and housing. Good health should be promoted by avoiding overcrowding and excessive herd and flock sizes.
Peter Stevenson
Alliance to Save Our Antibiotics

Prime minister claims EU-US deal could create 2m jobs but anti-poverty activists warn that it could sow seeds of next crisis

David Cameron held out the prospect of Europe and the US concluding the "biggest bilateral trade deal in history" after Washington and Brussels agreed on Monday to launch talks to free up markets on both sides of the Atlantic.

The prime minister was joined by Barack Obama and the European commission president, José Manuel Barroso, as negotiations were formally launched at the start of the UK-hosted G8 summit in Northern Ireland.

Cameron, frustrated at the lack of progress in the global Doha trade liberalisation talks, said an agreement could help bring down high levels of unemployment by creating up to 2m jobs globally. "This is a once in a generation opportunity and we are determined to seize it," he said.

Cameron, whose domestic economic strategy requires export-led growth, said the deal would mean extra jobs, more choice and lower prices for the UK.

With the stalled Doha talks now in their 12th year, Obama warned that the negotiations – which the UK hopes will be completed by the end of 2014 – are unlikely to be trouble-free. Officials from the EU and the US will meet for the first time in Washington next month.

France insists that cultural industries are excluded from the negotiations, fearing that the planned transatlantic trade and investment partnership will increase Hollywood's power in Europe.

"This is a priority for the United States," the American president said. "We will give negotiators a strong mandate but we will have to intervene to break through logjams."

Washington and Brussels have warmed to the idea of cutting their own bilateral trade deal after it became clear that they would not be able to overcome the objections of leading developing countries – such as India and Brazil – to a global agreement involving the liberalisation of manufactured goods, services and agriculture.

In the past, international trade talks have been dominated by the EU and the US, and Obama stressed that some of the old tensions could resurface. "We must resist the temptation to downsize our ambitions and avoid the difficult issues just ton get a deal," he said.

"There are going to be sensitivities on both sides. There are going to be politics on both sides but if we can look beyond the narrow concerns to stay focused on the big picture, the economic and strategic importance of this partnership, I'm hopeful we can achieve the high-standard comprehensive agreement that the global trading system is looking to us for."

Obama, who has been critical of the failure of the eurozone to end its three-year sovereign debt crisis, warned that trade was not a silver bullet but had to be part of a comprehensive strategy.

The president said: "The US-EU relationship is the largest in the world. We trade about $1tn [£650bn] in goods and services each year, we invest nearly $4tn in each other's economies and all that supports around 10m jobs on each side of the Atlantic. This potential ground-breaking partnership would deepen those ties."

"We're talking about what could be the biggest bilateral trade deal in history," Cameron said as he predicted that a successful deal would add up to £100bn to the EU economy and up to £85bn to the US economy. "A deal that will have a greater impact than all the other trade deals on the table put together."

The prime minister has made trade liberalisation one of the main themes of the G8 summit. UK officials said an agreement could boost British trade by £10bn – worth £380 for each household.

Cameron added: "The whole point is to fire up our economies and drive growth and prosperity around the world – to do things that make a real difference to people's lives. And there is no more powerful way to achieve that than by boosting trade."

Barroso said: "Negotiations might not always be easy but they will be worth it. We will find solutions to thorny issues, we will keep our eyes on the prize and we will succeed. We intend to move forward fast."

Although much transatlantic trade already has low or no tariffs, there are a number of sectors, such as financial services, where officials believe there is scope for liberalisation.

The volume of goods exchanged across the Atlantic – a third of global trade – means that a free-trade area would be a significant bloc. The EU is also keen to end swingeing duties on high-value European produce such as cheese and champagne.

The bulk of the talks will focus on bringing EU-US regulations into line. This could mean that American medicines that have passed US safety regulations would not face a second barrage of checks once they arrive in Europe, or a British airline flying from London to Los Angeles would be allowed to pick up passengers in New York – a practice currently banned because European airlines cannot operate domestic flights in the US.

From genetically modified seeds to chlorinated chickens, the EU and the US have a long history of trade spats. Both sides insist that "parochial" concerns should not be allowed to derail the hoped-for trade agreement.

The Bertelsmann Foundation thinks that the US would be likely to be the biggest winner, with a long-term boost of 13.4% to its gross domestic product per capita, compared with 5% for the EU.

Pascal Lamy, director general of the World Trade Organisation, believes that agreeing a bilateral deal will not be easy, largely owing to problems in harmonising zing different product standards in the EU and the US.

Tim Jones, policy officer at the Jubilee Debt Campaign, said: "This trade deal is about further deregulating the economy. Hiding behind the name of 'trade' are a raft of measures which will make it harder to prevent banks being reckless.

"At the same time as failing to deal with the current financial crisis, G8 leaders are sowing the seeds of the next."

Instead a negotiation process that is neither democratic and or transparent is likely to perpetuate a managed trade regime

Though nothing has come of the World Trade Organisation's Doha development round of global trade negotiations since they were launched almost a dozen years ago, another round of talks is in the works. This time the negotiations will not be held on a global, multilateral basis. Rather, two huge regional agreements – one transpacific, and the other transatlantic – are to be negotiated. Are the coming talks likely to be more successful?

The Doha round was torpedoed by the US refusal to eliminate agricultural subsidies – a sine qua non for any true development round, given that 70% of those in the developing world depend on agriculture directly or indirectly. The US position was truly breathtaking, given that the WTO had already judged that America's cotton subsidies – paid to fewer than 25,000 rich farmers – were illegal. Washington's response was to bribe Brazil, which had brought the complaint, not to pursue the matter further, leaving in the lurch millions of poor cotton farmers in sub-Saharan Africa and India, who suffer from depressed prices because of America's largesse to its wealthy farmers.

Given this recent history, it now seems clear that the negotiations to create a free trade area between the US and Europe, and another between the US and much of the Pacific (except for China), are not about establishing a true free trade system. Instead, the goal is a managed trade regime – managed, that is, to serve the special interests that have long dominated trade policy in the west.

There are a few basic principles that those entering the discussions will, one hopes, take to heart. First, any trade agreement has to be symmetrical. If, as part of the Trans-Pacific Partnership (TPP), the US demands that Japan eliminate its rice subsidies, Washington should, in turn, offer to eliminate its production (and water) subsidies, not just on rice (which is relatively unimportant in the US) but on other agricultural commodities as well.

Second, no trade agreement should put commercial interests ahead of broader national interests, especially when non-trade-related issues like financial regulation and intellectual property are at stake. America's trade agreement with Chile, for example, impedes Chile's use of capital controls, even though the International Monetary Fund now recognises that they can be an important instrument of macro-prudential policy.

Other trade agreements have insisted on financial liberalisation and deregulation as well, even though the 2008 crisis should have taught us that the absence of good regulation can jeopardise economic prosperity. America's pharmaceutical industry, which wields considerable clout with the office of the US Trade Representative (USTR), has succeeded in foisting on other countries an unbalanced intellectual property regime, which, designed to fight generic drugs, puts profit ahead of saving lives. Even the US supreme court has now said that the US Patent Office went too far in granting patents on genes.

Finally, there must be a commitment to transparency. Those engaging in these trade negotiations should be forewarned. The US is committed to a lack of transparency. The USTR's office has been reluctant to reveal its negotiating position even to members of the US Congress – and on the basis of what has been leaked, one can understand why. It is backtracking on principles – for example, access to generic medicines – that Congress had inserted into earlier trade agreements, such as that with Peru.

In the case of the TPP, there is a further concern. Asia has developed an efficient supply chain, with goods flowing easily from one country to another in the process of producing finished items. The TPP could interfere with that if China remains outside of it.

With formal tariffs already so low, negotiators will focus largely on non-tariff barriers, such as regulatory ones. But the USTR's office, representing corporate interests, will almost surely push for the lowest common standard, levelling downward rather than upward. For example, many countries have tax and regulatory provisions that discourage large automobiles – not because they are trying to discriminate against US goods, but because they worry about pollution and energy efficiency.

The more general point, alluded to earlier, is that trade agreements typically put commercial interests ahead of other values – the right to a healthy life and protection of the environment, to name just two. France, for example, wants a "cultural exception" in trade agreements that would allow it to continue to support its films – from which the whole world benefits. This and other broader values should be non-negotiable.

Indeed, the irony is that the social benefits of such subsidies are enormous, while the costs are negligible. Does anyone really believe that a French art film represents a serious threat to a Hollywood summer blockbuster? Yet Hollywood's greed knows no limit, and America's trade negotiators take no prisoners. And that's precisely why such items should be taken off the table before negotiations begin. Otherwise arms will be twisted, and there is a real risk that an agreement will sacrifice basic values to commercial interests.

If negotiators created a genuine free trade regime that put the public interest first, with the views of ordinary citizens given at least as much weight as those of corporate lobbyists, I might be optimistic that what would emerge would strengthen the economy and improve social well-being. The reality, however, is that we have a managed trade regime that puts corporate interests first, and a process of negotiations that is undemocratic and non-transparent.

The likelihood that what emerges from the coming talks will serve ordinary Americans' interests is low. The outlook for ordinary citizens in other countries is even bleaker.

© Project Syndicate 1995–2013

On Saturday, Brazil's Roberto Azevêdo becomes director of the World Trade Organisation at what is a critical time. It is accepted by most pundits that the international system is failing to respond to crises in finance, climate and food. Unfortunately, in the past, the WTO has succumbed to pressure to promote the narrow commercial interests of the most powerful trading nations and the largest corporations, at the expense of wider public interest and smaller economic enterprises. Azevêdo must seize this chance to bring about a sea change in the organisation and the Trade Justice Movement urges him to resist the Doha proposals which would extend the deregulation that underpinned the global economic crisis.

Azevêdo has spoken clearly on the dangers of unfettered trade liberalisation and trade-distorting subsidies. Now he must turn those words into actions. As members and supporters of the Trade Justice Movement in Britain, we will strive to ensure his words are matched with actions.

Marilyn ThompsonChair, Central American Women's Network,Paul ValentinInternational director, Christian Aid,Nick DeardenDirector, Jubilee Debt Campaign,Anna McMullenDirector, Labour Behind the Label,Adam RamseyActivism manager, People and Planet,Bente MadeiraCo-founder, Reading International Solidarity Centre,Ann GarvieInternational president, Soroptimist International,Paul SprayDirector of policy and programmes, Traidcraft,John HilaryExecutive director, War on Want,Deborah DoaneDirector, World Development Movement

India says paying farmers higher prices will help boost food security, but critics say it will hurt poor producers elsewhere

India is pushing hard for a change to global trade rules that would allow governments in developing countries more leeway to pay poor farmers above-market prices for food for national stockpiles. Critics warn, however, that such a policy shift – which India is pursuing in the name of food security – could end up hurting poor producers in other parts of the world.

The proposed rule change was officially put forward by the G33 coalition of developing countries last November, but India is widely acknowledged to be the driving force behind the bid. Debate on the issue is heating up as negotiators prepare for the World Trade Organisation's (WTO) next high-level meeting, which is due to take place in Bali in December.

Officials in India, which is home to about one-quarter of the world's hungry, insist that the rule change is essential to the country's development.

"The farmers [need] some sort of a price guarantee," says Jayant Dasgupta, India's ambassador to the WTO. "If you can't give this price guarantee, then many of the farmers who are on the margins may quit farming … Food production will go down, lands will lie fallow, and the unemployment problem will increase."

In August, India's parliament voted to expand the country's wide-ranging agriculture subsidy programme significantly. The new food security act, which took effect in September, aims to provide subsidised rice, wheat and millet to two-thirds of the country's 1.2 billion people.

But if India pays its farmers above-market prices to build those stockpiles of grain, then analysts say the scheme is likely to cause the country to breach its subsidy limits at the WTO. That would leave it open to challenges from other countries, which could sue India under the WTO's dispute settlement body for violating its subsidy commitments.

Ten years ago, India spent nearly $15bn on domestic farm support (in the 2003-04 market year). The country hasn't reported any subsidy data to the WTO since, but analysts say that the figure has certainly grown (pdf).

The WTO rules on farm subsidies are designed to prevent domestic policies from distorting the price of food on the international market. India claims that the food it procures for its stockpiles is intended for domestic consumption, but analysts say that once those stocks are released into the market, they could very well be shipped overseas. Critics warn that a flood of cheap food imports from India could threaten the livelihoods of farmers in other countries, who may suddenly be forced to compete with the heavily subsidised Indian grains.

Relatively rich developing countries such as Indonesia, China and the Philippines are rumoured to support India's request, but opposition to the proposed rule change is strong and widespread.

"It is ironic that this proposal comes under a title of 'food security'," Michael Punke, the US ambassador to the WTO, told a meeting of trade officials in April. "Even if it did contribute to food security for the two or three countries that can afford the costs to support such a system – and this is debatable – it will certainly create volatility and insecurity for the vast majority of others."

Even within the G33 coalition, which officially submitted the proposal last year, opinions are now divided.

"Providing market price support to a large number of farmers is not [in the interest of] food security for everyone," said Aisha Moriani, a trade official from Pakistan, which is a G33 member. "It can lead to unsustainable production and also affect the competitiveness of other producers. If the world's biggest rice exporter is seeking exemptions which will destroy small farmers in the rest of the world, I think that's a very unreasonable request."

But the true economic impact of the proposed change may not be so clear cut, says Jamie Morrison, a senior economist at the UN Food and Agriculture Organisation and co-author of a recent analysis, published by the International Centre for Trade and Sustainable Development (pdf), on the potential impacts of the Indian-backed proposal.

"It's not necessarily the case that it will be bad for food security in other countries," says Morrison. "A lot comes down to the way in which the scheme is designed [and] how it's implemented … Taking a little bit more time with this, I think, would make a lot of sense."

Modernising trade processes has the potential to deliver rich rewards for poor countries

The traditional symbol of customs and borders services is the portcullis – the fortification through which a ship used to enter a port. But as developing countries are increasingly asked to recognise the benefits of liberalised trade to the detriment of their import duty revenue, how can they be helped to raise the portcullis? And is it really in their interests to do so?

With world trade growth expanding more than twice as rapidly as gross domestic product (GDP) over the past decade, says Steve Brady, director, Customs and Trade Facilitation for development consultancy Crown Agents, the potential rewards from participating in world trade are significant. "According to figures from WTO, in 2011 world merchandise exports and imports in real terms grew by over 5%. As a result, each reached over $1.8tn, the highest level in history."

The major players working with developing country governments to help them benefit from this increase in trade include the World Bank, ICC, World Customs Organisation (WCO), IMF, UN Conference on Trade and Development (Unctad), development banks and specialist intermediaries such as Crown Agents.

A number of countries have improved their capacity as a result of international and domestic efforts, yet some are still hesitant to do so. The Centre for Customs and Excise Studies (CCES) at the University of Canberra finds that many developing country governments are heavily dependent on the revenue from import duties – in some cases this can be as high as 70% of a country's total revenue base. The desire to protect this is understandably strong. Yet this same desire can be used to drive forward modernisation efforts, explains Professor David Widdowson, CEO of CCES. "Revenue leakage resulting from commercial fraud, poor customs and border procedures and corruption represents a major impediment to poverty reduction."

Similarly time-consuming manual processing systems, over-regulation, or outright corruption, will discourage trade and investment and further undermine a country's development. "In the worst cases up to 20 signatures are required to obtain customs clearance of goods, all of which require 'informal payments'," says Widdowson. "I have also seen examples of 15 different government agencies playing some role at the border, all acting independently."

Guidelines or blueprints to modernise such customs and borders processes are available, for example, via the revised Kyoto convention (extolling the basic principles of automation, simplification, responsiveness to the regulation, consistency and co-ordination); the "Framework of standards to secure and facilitate global trade" developed by the WCO; and its "Columbus programme."

Turkey is cited by Sandeep Raj Jain, economic affairs officer at the United Nations Economic and Social Commission for Asia and the Pacific (Escap), as a case study for the successful modernisation of customs systems, having consolidated 18 previously autonomous border gates and introduced a single IT clearance system, leading to an increase in tax revenues and a decrease in clearance time to the benefit of incoming and outgoing trade. Angola increased receipts sixteen-fold from $215.45m in 2000 (£148m) to $3,352m in 2011 through an improved National Customs Service and the introduction of an automated entry processing system and customs clearance Single Administrative Document.

The African Development Bank also supported post-conflict Liberia with the extension of an automated system for customs data, helping to reduce the time to clear goods at the port from 60 days to less than 10 days and increase revenue collection at three ports from about $4m a month to $10m-$12m. This, Ellen Johnson Sirleaf, president of Liberia has said, given the government additional scarce revenues to invest in the projects to improve the livelihoods of people.

Horror stories also abound of revenue loss, acting as a cautionary tale for leaving outdated customs processes untouched. A World Bank report, for example, finds that in Algeria smuggling caused a loss to the public exchequer rising from DA18bn in 2006 ($237m) to over DA61bn in 2011.

The message from the international community is that improved, automated and transparent customs services not only help eradicate theft and corruption, but also increase revenue through increased trade. Any fall in revenue from import tariffs due to signing up to bilateral free trade agreements can also be offset, says Bijal Tanna of Ernst & Young LLP: "One only has to look at the take-up of VAT by countries since the 1980s to understand that there is a consumer tax outlet to offset any loss of revenue from customs duty reductions. Back in the late 1980s, approximately 50 countries had VAT, now it is in place in over 150 countries."

However, these arguments don't always reach an appreciative audience. "In my experience", says Widdowson, "economies may give lip service to the trade facilitation agenda, including entering into free trade agreements, but still expect their customs administration to collect traditional levels of duty. For example, with the introduction of free trade arrangements – hence falling duty rates – and a downturn in international trade, the Philippines continues to increase the 'revenue targets' of its bureau of customs, the derivation of which appears to be devoid of any analytical rigour."

Tanna also points to the collapse of the Doha round of the WTO negotiations heralding a breakdown in efforts to find a single global platform to drive a uniform approach to trade liberalisation. Perhaps it is the obligation of the international community to renew such efforts, alongside projects to improve customs systems in-country.

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Is the western notion of IP right for poor countries? Should their entrepreneurs be expected to play in the same ballpark with giants such as Google?

In Kenya, where I live and work, the patent office, which is among the most active of patent offices on the African continent, has issued a total of 589 patents since the office opened in 1991. Compare that with the 5,500 patents issued by the US patent office in a single week in July this year.

An even scarier statistic is that, of the 50 or so patents granted in Kenya each year, between zero and five (on average) are granted to local Kenyan organisations or individuals. The remaining patents are granted to foreign firms, most of which are pharmaceutical companies.

The minimal number of issued patents is not due to a lack of innovation or entrepreneurship in Kenya. These are both present in abundance and the type of innovation that I've seen is typically of a kind that would be suitable for patent protection. Instead, the lack of patents is due to a lack of patent expertise in the private sector, and a lack of funds available to hire expensive patent drafting services from firms in Europe, South Africa, or India.

Without access to proper patent drafting, it is difficult for the Kenyan patent office to find applications that are suitable for granting as patents, and the ability of local inventors to obtain patents is severely diminished. Subsequently, without patents, the ability of local inventors to attract foreign investment and partnerships, and to build companies that are based on intellectual property (IP) assets, are also severely diminished.

In patent-laden countries such as the US, Japan and blocs like the EU, it is common for patent lawyers to have science and law degrees. Patent lawyers with similar qualifications are found only in South Africa, in Africa. Accordingly, the skills needed to protect innovations via well-drafted patents are scarce, almost non-existent.

One way to solve this problem is to train more people in Kenya and other countries in Africa in the skill of drafting and obtaining patents. I spend much of my time offering such skills-training but it is a long-term commitment (it can take a year or more) and with very little to show in the short term, there seems little incentive to acquire these skills.

It doesn't take long given the context before one starts asking some fundamental questions: is the western notion of patent rights the best system for Kenya? Could it be that a different system would do a better job of promoting innovation – which is ostensibly the raison d'être of the patent system? Is it reasonable to expect Kenyan entrepreneurs, businesses, and inventors to play in the same patent system with corporate giants such as Google, IBM, and Pfizer?

These are questions that not only apply to Kenya but also to much of the developing world. In a recent article Nagla Rizk, a prominent Egyptian IP scholar in the area of copyright, argued: "In developing countries poor people frequently find themselves in the dilemma of having to choose between the expensive original and the unlawful copy. It comes as no surprise that the less privileged would have stronger tendencies toward the illegal. Here, the need for novel business models that balance the needs of knowledge creators and users becomes evident, especially given the vast development of enabling technologies."

Most countries today (including Kenya) have so-called 'Trips-compliant' intellectual property laws. Trips – Trade-Related Aspects of Intellectual Property Rights– is a framework that applies to all World Trade Organisation member countries and compliance requires IP laws that largely resemble those of developed countries. So although there are minor variations from country to country, the IP laws of developing countries look (or will someday look) like those in the US or Europe. What this means is that there is very little opportunity for countries to tailor their IP laws to meet their individual needs, unless they wish to withdraw from the WTO.

It is often argued that the existence of IP laws incentivises innovation (as the monopolisation of knowledge or products create profits for those who own the IP rights) but considering the low number of patents in Kenya, the current high level of innovation cannot be attributed to incentives offered by the western-style patent regime that is in place.

Copycat businesses are a way of life here, and while they are fatal to some businesses, they are not always (or even usually) an insurmountable hurdle. Consider that M-Pesa, the most successful mobile money transfer system in the world and hugely profitable, must compete with at least three other nearly identical systems.

Despite the benefits of WTO membership and of safeguarding one's intellectual property, the fact is that on balance, the western patent model is not yet helpful to most Kenyan – or African – entrepreneurs. The day may come when this is no longer the case, and in the meantime there is no doubt that more Africans should be exploiting the existing system. Still, the dream is for the day when foreign investment in African-owned patent assets will exceed foreign aid.

Isaac Rutenberg is director of the Centre for Intellectual Property and Information Technology Law, Strathmore Law School, Nairobi, Kenya. He tweets as @iruten

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Roberto Azevêdo is pressing members to salvage measures from stalled Doha talks before Bali meeting next month

The head of the World Trade Organisation (WTO) yesterday urged diplomats to stop bickering about a mini package of liberalisation designed to boost global commerce and warned of serious damage to the 20-year-old institution if last-ditch talks failed.

Roberto Azevêdo, the WTO's new director general, expressed disappointment at the failure to conclude negotiations aimed at salvaging something from the stalled Doha Round of trade talks, now in their 13th year.

With Europe and America in talks about a transatlantic trade deal, Azevêdo believes the future of the WTO as a multilateral negotiating forum will be in severe doubt unless it can pick what one source called the "low hanging fruit" from the tortuous Doha process.

Plans for a comprehensive deal including freer trade in agriculture, services and industrial goods have already been drastically pared back, with the WTO now trying to get agreement on a mini package involving food security, reducing customs red tape and better access to Western markets for developing countries.

Azevêdo has been pressing WTO members to complete the talks before the organisation's ministerial meeting in Bali early next month but admitted even a less ambitious deal was proving difficult.

"It is very disappointing to be in this position today. But ... that's where we are."

Threats to an agreement have come from Washington's determination that China no longer be treated as a developing country, from Argentina's insistence on a 50% cut in agricultural export subsidies in rich countries, and from a wrangle over when poor countries should improve their customs procedures.

Azevêdo said the only option was "to make a last ditch attempt – to continue this effort and continue our work for a few more days". He said a deal had to be concluded in Geneva so that it could be rubber-stamped by ministers in Bali.

"There can be no delays – we need to start closing issues now."

WTO ruling claimed as victory by conservationists who campaigned against hunts in Canada and Norway

The World Trade Organisation has upheld a European Union ban on imported seal products, finding it addressed "public moral concerns" about the controversial hunt.

The WTO ruling was claimed as a victory by conservationists and animal welfare activists who have been campaigning for years against such hunts in Canada and Norway.

Monday's ruling did find some flaws in the 2010 ban, but found that: "It fulfils the objective of addressing EU public moral concerns on seal welfare to a certain extent, and no alternative measure was demonstrated to make an equivalent or greater contribution to the fulfilment of the objective."

However, the trade organisation said the exceptions granted under the EU ban were not "even-handed", and would have to be revised.

The EU had exempted seal products resulting from Inuit or other aboriginal hunts, as well as from hunts conducted to protect fishing stocks.

"The report from WTO panel is a victory for seals, animal welfare and Europeans," Sonja Van Tichelen, EU regional director for the International Federation for Animal Welfare, said in a statement.

Canadian Inuit leaders, speaking to CBC radio ahead of the decision, argued that the ban was discriminatory.

"They're basing it on public morals and, when you do that, you're in danger of all the other industries being banned in the same way. I mean, who's to say what's more cruel? Industrialised agriculture? The poultry, pork and beef industry? Who draws the line?" said Terry Audla, president of the Inuit Tapiriit Kanatami, which represents about 55,000 people.

With the EU embargo in place, some 34 countries now ban the trade in seal products. The US, Mexico, Russia and Taiwan also ban imported seal products.

Canada's seal hunt has declined over the years. The commercial seal hunt off Newfoundland resulted in about 91,000 harp seals last year, well below the government quota of 400,000.

There are 60 days to appeal the WTO decision.

Archaic subsidy rules that short-change poor countries must be addressed to avoid a pathetic compromise at world trade talks

For developing countries, it seems, the more things change, the more they stay the same. Despite all the talk of global power shifts and the rise of emerging economies, the runup to the World Trade Organisation (WTO) ministerial meeting in Bali next week has once again forced developing countries on to the back foot despite having reason and ethics on their side.

The recent inability to close a deal in Geneva before the talks reflects the intransigence of some governments – the US in particular – in the face of what seem to be fairly commonsense and fair proposals to rectify large anomalies in the trade rules, and demand a pound of flesh in return for every such "concession".

The Doha development round of trade talks is all but dead, and only two issues have survived to merit serious consideration at Bali. One is "trade facilitation" – the harmonising and standardising of customs rules and procedures that is an agenda of the global north to ease import practices across the world. There are the usual noises being made about how this will dramatically increase both trade and employment worldwide, on the basis of spurious empirical exercises.

The other issue is more central: the focus on agricultural subsidies, which affects the livelihoods and food security of more than half the world's population. Unfortunately, some wealthy countries have demanded acceptance of the former while refusing to make even the most obvious adjustments to meet the latter.

Since the WTO's Agreement on Agriculture took effect in 1995, world trade patterns have changed, and there are forces distorting food trade that are not being adequately addressed. Subsidies that wealthy countries give their farmers and agribusinesses are mostly classified as "non-distorting" measures, and remain high. A few multinational agribusinesses have increased their domination of global trade and food distribution. Speculation in commodity futures markets is creating volatile price movements that do not reflect true changes in demand and supply.

All this is bad for small producers, who do not benefit from price increases and lose out when prices decline with import surges. It is also bad for poor consumers, who face much higher prices for their food. In many developing countries this has created two linked problems: food insecurity because of high and volatile food prices, and livelihood insecurity of food producers because of rising costs and uncertain supply.

In the meantime, developing countries must find some way to ensure their citizens' food and livelihood security. Many countries try to do so by introducing measures to make food affordable for low-income consumers or by encouraging domestic food production, particularly through supporting small farmers.

The trouble is that such measures sometimes come up against existing WTO rules. Thus, India's recent law that seeks to provide food security to one of the largest undernourished populations in the world has been challenged by the US in the WTO, even though India's scheme would cost a fraction of what the US provides in food subsidies.

This is because of unbalanced and what should be archaic rules that allow higher levels of subsidies and protection for rich countries compared with developing ones. The WTO recognises three kinds of agriculture subsidies.

"Amber box" measures are those that distort trade most severely. Developing countries are allowed to provide such subsidies worth up to only 10% of the total value of their agricultural production; developed countries are allowed up to 5%.

The second category of subsidies, the "blue box", are considered slightly less distorting; developing countries are subject to an 8% ceiling on their blue box support.

And finally, "green box" subsidies are those that are not thought to distort trade at all; these are not subject to any conditions or limitations. Examples of green box subsidies include direct income support to farmers as well as policies for environmental protection and regional development. Most developed countries have shifted towards green box subsidies for agriculture, so they continue to provide enormous support to their farmers without breaching WTO commitments.

But developing countries trying to ensure food security may need more flexibility than global trade rules allow. To that end, the G33, a coalition of developing countries at the WTO, has suggested broadening the green box to include policies such as land reform programmes, the provision of infrastructure, and rural employment initiatives.

It is important to expand the definition of green box support to account for the specific needs of developing countries. For example, some governments may find it necessary to provide crop-specific subsidies to encourage farmers to cultivate more food crops, thus lowering prices for consumers.

Government purchases of crops at fixed, or "administered", prices can be an essential policy instrument. Under WTO rules, however, if governments pay farmers at rates that are even slightly above market prices when they are stockpiling food, those payments count toward the country's 10% amber box ceiling. But grain reserves can be essential to domestic food security, allowing countries to guard against sudden movements in global food prices. So such payments should also be classified in the green box.

Most bizarrely of all, to calculate the level of current subsidies, the WTO uses prices of 25 years ago (the average 1986-88 global prices). This is clearly ridiculous since food prices have shot up since then, so recent prices should be used as the reference. But developed countries currently refuse to agree to this because "it will open up the agreement."

Surprisingly, developed countries are contesting all of these points in the WTO negotiations. So a "peace clause" that would temporarily suspend WTO actions against countries that exceed their amber box limit is being suggested as a fallback negotiating strategy. But such an outcome should be accepted only as a transitional measure towards full recognition of the legitimacy of such policies to ensure food security.

The WTO rules make a travesty of the first millennium development goal, to reduce hunger. If the world community is truly concerned about hunger, then it should not let unfair trade rules reduce developing countries' ability to do something about it.

Yet there is little global outcry about the state of the negotiations, and there are fears that the pressure to do a deal – any deal – at Bali may lead to developing countries accepting this pathetic compromise with no real gain. People everywhere need to make this a much more vital issue on which no compromise can be tolerated.

The WTO will cease to exist as a forum for serious trade liberalisation talks if countries fail to reach agreement this week

Globalisation is in retreat. Countries are becoming less reliant on each other. They show a willingness to use currency manipulation as an economic tool. Surreptitious protectionism is being deployed. For the most part these developments are happening below the radar, which is why it has been possible to ignore them.

That will not be the case this week when trade ministers from 159 countries meet in Bali in the hopes of salvaging something from 12 years of so far fruitless talks.

Bali matters. At stake is not just the future of the World Trade Organisation, but the way and for whom the global economy is governed. There is everything to play for when the WTO ministerial meeting begins on Tuesday.

Trade ministers have travelled far and wide in search of a deal. In 1999, talks called to launch a new round in Seattle were the story of bad blood at the negotiating table and riots on the streets. It took a burst of international solidarity after 9/11 to launch the talks in Doha two years later.

Cancun in 2003 saw a further setback as a group of the leading developing countries made it clear that they were not prepared to accept the usual stitch-up organised by the US and the European Union. Now it is make or break time. When the talks began in 2001 the talk was of opening up new fronts in trade liberalisation, cutting tariffs and tearing down protectionist barriers in services and agriculture just as they had been progressively in manufacturing in the decades after the second world war.

All that's left now of the original agenda is a proposal to cut trade red tape and root out corruption at borders, coupled with the promise of easier access to western markets for the world's least developed nations.

But even the low-hanging fruit is proving hard to pick. Developing countries say they will need time and money to improve their customs practices, while western nations say that without a trade facilitation deal they will not sign off on better access to their markets for exports from the poorest countries. A bigger problem may be India's insistence that it be allowed to stockpile subsidised grain to ensure food security. The Americans are unhappy about providing an open-ended commitment.

The package on the table would have little real impact on the global economy. On the other hand, failure this week would be a disaster for the WTO, which might continue as the court where trade disputes are settled but would cease to exist as a forum for serious trade liberalisation talks.

Already, the bigger global players are seeking to cut their own side deals, seeing that as easier than the tortuous process of getting agreement at the WTO. Washington and Brussels almost certainly underestimate the time and effort it will take to forge their transatlantic trade partnership, but frustration with the WTO process means that's where the political energy already is. A big fat zero in Bali could easily result in the EU and the US giving up on multilateral negotiations completely.

So how did it come to this? Well, let's start by turning the clock back to Geneva in December 1993, when Peter Sutherland, the then head of the General Agreement on Tariffs and Trade, ended the Uruguay round of trade liberalisation talks. It was four years after the end of the cold war, two years since the collapse of the Soviet Union.

China and India were opening their economies up and Russia was being given free-market shock treatment. It was the high noon of liberalisation. Even so, completing the Uruguay round was no picnic. It took seven years and was only brought to a conclusion after the G7 took a hand at its 1993 summit in Tokyo. Few though would have suspected that the world would still be waiting for a successor to the Uruguay round two decades later.

There was no desire to launch another round immediately, and the priority by the end of the 1990s was to secure China's entry into the WTO, something that coincided with the launch of the Doha round in November 2001. But since then, there have been a number of developments that have made it much harder to secure an agreement. The first is the impact of the financial crisis and the recession that followed. This has made countries more inward-looking and cautious about opening up their markets to foreign competition.

A second has been rising energy prices, which have pushed up the cost of transporting goods around the world and made offshoring less attractive. A third has been the growing prosperity of China, where labour costs are still low in comparison with those in the west but not as low as they were a decade ago.

James Carrick, economist at Legal & General, says: "Since 2006, the ratio of global imports to production has moved sideways. In other words, a product bought today is using the same proportion of domestic and foreign components as a product bought six years ago. This is in sharp contrast to the prior two decades of globalisation, when more and more of the goods we bought were made overseas.

"The pause in import penetration has not just happened in weak economies like the UK and the euro area, but has been most pronounced in China – the strongest economy – as well as the relatively robust US." Carrick says closer integration of economies in the 1990s was associated with cheaper imports into the west from China and other emerging economies, so a stalling of globalisation can be expected to lead to higher global inflation.

The stalling may not be temporary. Technological trends suggest the world will become more integrated; political trends point in the opposite direction. In the west, globalisation is not associated with cheaper imports but with manufacturing jobs being lost to offshoring and service sector jobs threatened by cheap migrant labour. Few voters will be impressed by warnings from business groups that failure in Bali will mean throwing away the possibility of a $1tn boost to the global economy.

That's only partly because the $1tn figure is made up; it's also because the public now associates increased integration with falling wages and job insecurity. Precedent suggests that if there is a $1tn boost to the global economy on offer, the benefits will accrue to capital as higher profits rather than to labour in the form of higher pay or lower prices.

Free trade is seen as a racket dominated by a particular class interest. Unless that changes and the fruits are more equitably shared, the WTO will continue to stumble from crisis to crisis and globalisation will remain a dirty word.

Next week's WTO round in Bali is unlikely to produce a deal, but developing countries are optimistic about an agreement on three issues; red tape at borders, farm subsidies and food security

Trade ministers, policy wonks, activists, journalists, and various other hangers-on are on their way to Bali for the World Trade Organisation's (WTO) next high-level meeting, which starts on Tuesday [3 December] and will run until the end of the week. What could it mean for developing countries.

Why is the WTO having another meeting?

Roughly once every two years, trade ministers get together to try to make a breakthrough in the world trade talks. The current round has been stumbling along since November 2001. Trade officials in Geneva work on these issues every day, but the big announcements usually come only when ministers get involved. Technically, this week's meeting is the WTO's ninth ministerial conference, or #MC9 if you're following on Twitter.

What's on the table this time around?

Possibly not very much, as it turns out. Trade officials in Geneva have been negotiating hard over the past few months to hammer out a text that ministers could sign when they meet in Bali. But last week, after marathon talks at the WTO's Geneva headquarters, the organisation's new director-general, Roberto Azevedo, announced that delegates had failed to reach agreement. However, there's still a chance that trade ministers could pull a deal out of the bag during this week's conference.

What's at stake for developing countries?

Although the odds are long, it's still possible that trade officials could reach agreement on three issues, each of which could have a significant impact on developing countries. The biggest is a potential agreement on "trade faciliation" – WTO-speak for cutting red tape at border crossings. Agriculture is another, specifically farmer subsidies and whether countries should be allowed more flexibility to implement their own food security policies. And finally, officials are trying to come to agreement on a package of issues that directly affect Least Developed Countries (LDCs). This last category includes the possibility that all LDC exports could be made duty free, among other issues.

What's so controversial?

Trade officials in Geneva were reportedly able to come to agreement on all but the first of those issues, trade facilitation. But because all three topics are being negotiated as a package, the whole deal falls apart if there's even a minor disagreement in one.

Trade facilitation has long been considered a low-hanging fruit in the WTO's beleaguered Doha round trade talks. To some, it seems like a no-brainer: By cutting red tape and other administrative barriers at border crossings, a WTO deal on trade facilitation could add $1tn to the global economy, according to the OECD.

Developing countries would have the most to gain from a deal because their customs procedures are generally more cumbersome than those of rich countries. But developing countries would also have to make the biggest changes if an agreement were reached, and many worry about being bound to rules that they might struggle to implement. To try to ease that transition, they have been demanding more financial assistance in return for adopting new customs reforms.

But some have suggested that the deadlock on trade facilitation might just be a front, and that the real problems lie in other parts of the "Bali package" – specifically in the section on food security. Given that the negotiations have been behind closed doors, it's hard to know for sure.

Does the WTO ever get anything done?

In its 18-year history, the WTO still hasn't managed to finalise a new global trade deal, despite more than a dozen years of intensive efforts in the Doha round. All decisions at the WTO are taken by consensus, which is good for equality but bad for efficiency. In the past 10 years or so, emerging economies like India, Brazil and China have started to throw their weight around in the negotiations, challenging the west's traditional dominance of world trade talks. So far, the drive for a deal hasn't been strong enough to get everyone to reach an agreement. We'll find out in the next few days whether the Bali meeting can change that.

Is it still worth paying attention?

Yes and no. The WTO may not have accomplished much, especially compared to some of the regional and bilateral trade talks that have heated up lately. But when it comes to multilateral trade rules, the WTO is still the only game in town. And that's critical for developing countries, which arguably have more leverage at the WTO, where a single country can shut down negotiations if it determines that the risks of a deal outweigh the potential benefits.

Moving towards open borders may be on the agenda for the Bali trade talks, but how do you ensure the benefits filter down to the wider economy?

Analysts of cross-border trade commonly refer to the "thickness" of a border. The more red tape and documentation required to move goods across a border, the thicker it is. Lack of co-ordination between customs directorates, poor IT infrastructure and corruption all add to this, and developing countries tend to have the thickest borders.

These burdens all add to the cost of trade and therefore encumber economic growth in developing countries. According to a report by the World Economic Forum, if every country improved just two key supply chain barriers – border administration and transport and communications infrastructure and related services – even halfway to the world's best practices, global GDP could increase by US$2.6tn (£1.6tn).

This process of trade facilitation was the subject of a seminar hosted on 21 November jointly by the Crown Agents Foundation and the Saana Institute, a new in-house think tank launched recently by Saana Consulting. The event brought together experts from various agencies to discuss – under Chatham House rules – the forthcoming negotiations on trade facilitation as part of the World Trade Organisation's fifth ministerial conference, which starts in Bali on 3 December.

Delegates heard some examples about the real cost of cross-border trade in developing countries and how this filters down through the economy. "If you're in Kigali and you buy a bar of soap imported from abroad, about 45% of the value of that will be transport costs," said one speaker. "It can take up to seven days to get through the Malaba border; there's sometimes a 25km queue. It costs a lot of money to keep a truck on the road. It can be $800 a day. This costs consumers money and erodes export competitiveness."

Some efforts are already being made at regional levels to try to overcome this. For example, the conference heard about the work done by the non-profit organisation TradeMark East Africa– whose funders include the Department for International Development, the Swedish International Development Agency and the Belgian Development Co-operation– to promote regional trade and economic integration in east Africa.

The East African projects to date have include the Single Window Information for Trade system , a trade facilitation concept that allows cross-border traders to apply for and submit regulatory documents at a single location. Previously, it was common for traders to spend days visiting different agencies in different locations to obtain the necessary permits and certificates. In Rwanda, the introduction of the system has led to a 40% reduction in clearance times.

This undoubtedly helps traders, but as one speaker pointed out, the real benefits of trade facilitation might be from the knock-on effects in the broader economy, rather than from increased trading volumes per se.

"The biggest benefit may come if traders have higher profits, which means they can pay higher wages, and therefore generate a tax base in the country that comprises formal waged employees and taxable profits. That may have a far more important benefit to the economy than an increase in trade, because many countries have a very low tax base, with typically no more than 20% of the labour force in formal employment. And it's only by funding services themselves and not relying on donors that countries can achieve sustainable development."

One of the key areas of negotiation in Bali will be on the second section of the draft agreement, which sets out the basis for special and differential treatment for developing countries and for the technical assistance and capacity building needed by them for the implementation of the agreement.

Unusually, the agreement proposes that developing countries stagger their commitments in a self-selected way across three categories of commitment: A for obligations that can be implemented immediately, B for obligations that require longer time frames, and C for obligations that need both longer time frames and technical assistance.

This menu-driven approach means that individual countries will have their own tailor-made form of special and differential treatment, which one speaker pointed out was uncharted territory for the World Trade Organisation. At the same time, developing countries are also facing a level of commitment which was described as being "against the spirit of the Doha Round", the negotiations that started in 2001.

"We can categorise these as A, B and C, but at the end of the day these countries are going to end up with some serious level and magnitude of commitment and this is unprecedented in the history of WTO negotiations," said the speaker. "This is something that policymakers have expressed concern about."

The fine details of how these commitments are worded and implemented is something that stakeholders will be watching closely in the run-up to Bali next week. But there was broad agreement that the completion of the trade facilitation agreement was necessary for the sake of the credibility of the Doha Round, and that it had the potential to be transformative for developing countries.

"We're not debating whether trade facilitation is good for countries and the global economy," said one speaker. "It's no longer developed against developing countries; it's a coalescence of themes and differences around themes. It's become a negotiation where, for the most part, all members are facing the same direction."

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The former director-general of the World Trade Organisation on aid for trade, life after WTO and what to do about China

What have you learnt in your career about the importance of trade, aid for trade, and the removal of trade barriers?

I believe trade opening can work for development but under a number of conditions. For example, if I'm an African producer of cut flowers, I will have duty-free access to the US, Europe and Japan. But if those countries enforce pesticide standards that I can't match, I won't be able to sell my flowers. So the issue is how a developing country can access the necessary network of labs, Euro standards, and checking procedures that get these flowers to the market. And that's not rocket science, it won't cost zillions of dollars. It's a question of $4-$5m. If this network isn't there, trade doesn't happen. If they are there, the multiplier on the amount of trade - on the revenue for farmers - is absolutely gorgeous.

This is, in my view, where the focus should be now. If I try to dissect what works and what doesn't in this part of development assistance and support – i.e. aid for trade - it's cross-cutting coalitions that work best, coalitions between businesses, civil society, local authorities, and national authority. Network building is the solution for the future.

The World Trade Organisation is by most public perceptions a very top-down, very command-and-control organisation. Is that an inaccurate perception?

First, it depends on who you talk to. If you look at the world as a whole, most people will agree that trade opening works for development. If you look at the numbers, the countries who have opened up trade have developed more quickly than those who have not. So I don't think that's the point. The point is: how can trade opening translate into revenue, growth and poverty reduction? Opening trade is a necessary but not sufficient condition, and so more attention has to focus on how you make it work.

This is why the big thing is aid for trade, which I started in 2005 with the World Bank and the European Development Fund; bilateral European donors and others. But small structures, like the International Trade Centre and TradeMark East Africa, have in my view much better results on the ground.

Can you share any best practices that the rest of the development community could replicate or learn from?

No, I think that initiatives such as TradeMark East Africa – which is a UK, Belgium and Nordic-sponsored initiative – have done well because they are extremely 'on the ground'. Asia, Cambodia for example, with different political systems and strong political coordination has also had results. It's a different model.

What can we expect from you post-WTO? What are you working on next?

I have to finish lots of things that I had no time to do when I was chief of WTO. I've written a book called The Geneva Consensus: Making Trade Work for All. I'm working on a big report with the Oxford Martin School on challenges for the future, and how you break this terrible gap between the knowledge of challenges and our political capacity to address them. And I have a few academic occupations in the US, Asia and Europe, and then next year I'll have a fresh look at what I want to do. It's a period of transition.

In the time you've been at the WTO, what is your proudest achievement? Conversely what are the changes you had wanted to see but didn't?

During this period, the WTO has done well with its core mission – keeping trade open. Trade is more open than it was eight years ago, it has benefited most developing countries, and we've resisted the protectionist temptation during the 2008 crisis. So, overall, it has played its role of being an insurance policy against protectionism.

What we haven't done is update the rule book. Notably to make it more development-friendly, such as removing agricultural tariffs and agricultural subsidies which distort trade against developing countries' comparative advantage. Also, industrialised, rich countries and emerging countries are not agreeing on what the rule of the game is for emerging countries. We know the rule of the game for rich countries, we know the rule of the game for poor countries. But WTO members have not made up their mind whether China is a rich country with many poor, or a poor country with many rich. Depending on how you answer this question, your trade regime will be different.

The people who head up international organisations are often depicted as nation-neutral, as if they don't belong to a particular country. But you're a Frenchman. What are your reflections on your country's position on development?

Most of what France does in this field now goes through Europe. In the EU, what member states do best bilaterally is a part of what the union as a whole does. True, France has a focus on Africa for historical reasons – which I think is justified – but overall I think the EU approach to development should, in the future, make Africa the priority. Not that there aren't issues in India, China, Latin America or central Asia, but I think the strategic priority for Europe should be Africa.

On the Africa rising or falling debate, which view do you side with?

Rising. 100%.

Pascal Lamy was director-general of the WTO from September 2005 to August 2013. Eliza Anyangwe caught up with him at the Convergences World Forum in Paris.

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World Trade Organisation officials optimistic as ministers from 160 countries enter final day of negotiations in Bali

Ministers from nearly 160 member countries of the World Trade Organisation entered a final day of negotiations on Friday with officials sounding optimistic over chances of salvaging a deal that would save the trade body from sliding into irrelevance.

"We are very close," WTO spokesman Keith Rockwell told reporters at the meeting on the Indonesian resort island of Bali. "As things stand now, the prospects are promising."

Just a day earlier, a deal that would add hundreds of billions of dollars to the world economy by some estimates teetered on the brink of collapse.

In an organisation based on consensus among all of its members, attention focused squarely on India as the main stumbling block to the WTO's first global trade deal in two decades.

India has insisted it would not compromise on a policy of subsidising food for hundreds of millions of poor, putting it at odds with the United States and other developed countries.

The WTO director-general, Roberto Azevedo, a former Brazilian trade negotiator, told delegates at the start of the last day of talks that there was more work to be done, but sounded upbeat on prospects for success.

"He told members they were now very close to something that has eluded us for many years and that the decisions over the next few hours would have great significance beyond this day," the spokesman said.

It is 12 years since the WTO launched the Doha Round, but the negotiations have yet to yield any concrete results. Diplomats have warned that failure in Bali would wreck the WTO's credibility as developed nations turn towards regional and bilateral trade arrangements.

A Bali trade deal, which is far less ambitious than the Doha Round had aimed for up until two years ago, would open the way to much wider trade reforms and enable the body to modernise its rules for the internet era.

The "all or nothing" agreement covers several areas, the largest of which is trade facilitation – a global standardisation and simplification of customs procedures that would tear down barriers to cross-border movement of goods.

Another part of the deal – and the one proving to be the most contentious – is focused on agriculture. Members seem largely in agreement over reducing export subsidies and opening borders to the least developed countries. The main obstacle to a deal is food subsidy policy.

India, whose government faces the risk of losing elections next year, says that its tough stance has drawn support from developing countries in Asia, Africa and South America, though the meeting's host, Indonesia, has pressed for it to soften its stand.

"We are trying to get justice for the poor people," India's trade minister, Anand Sharma, told reporters as he entered the final day of the meeting.

Thursday's talks had stretched into the early hours of Friday without reaching any agreement.

Asked if there was a deal on the table, Sharma replied: "We are talking."

The meeting was set to end at 3.00pm local time (7am GMT) but can be extended.

India will next year fully implement a welfare programme to provide cheap food to 800 million people that it fears will contravene WTO rules curbing farm subsidies to 10% of production.

The programme, which relies on large-scale stockpiling and purchases at minimum prices, is a central plank of the government's bid to win a third term in office next year.

A proposal led by the US offered to waive the 10% rule until 2017. But India has rejected it, demanding the exemptions continue indefinitely until a solution is found.

If talks were to fail, the WTO may see its role eroded by regional trade pacts now being negotiated, such as the US-led 12-nation Trans-Pacific Partnership and a US-EU tie-up known as the TTP.

Ministers in the TPP are expected to meet in Singapore shortly after the WTO meeting in the hopes of reaching a free trade pact by the end of this year.

The World Trade Organisation meeting has brought good news not just for Indian farmers, but potential breakthroughs for others

After more than a dozen years of negotiations in the Doha round trade talks– and a final push over the past four days during a high-level meeting in Bali – it seems the World Trade Organisation (WTO) has finally achieved something: the organisation's 160 members appear to have reached an agreement (pdf), which should be made official on Friday evening. The implications for developing countries are huge.

The Bali meeting's tense final moments came down to a standoff over food security, an issue that had divided developing countries. On one side, India was arguing that it should be allowed to pay its farmers above-market prices for the crops that it buys for the government's domestic food stockpiles. In a country where more than half of the workforce is employed in the agricultural sector, farming is very big politics. With elections looming in the first half of next year, Indian officials didn't want to look as though they were selling out Indian farmers on the world stage.

On the other side, developing countries such as Thailand, Pakistan, and Uruguay – all of which, like India, are major exporters of rice – contended that overpaid farmers in India could undercut producers in their own countries. The US was also a vocal opponent, arguing that India was asking for allowances that went against the spirit of the free trade talks, which generally aim to reduce – not increase – government intervention in the marketplace.

After closed-door meetings that lasted well into the early hours of Friday, the negotiators in Bali finally came to a provisional agreement (pdf), which is due to be finalised on Friday evening. Countries agreed to a four-year peace clause, meaning that they won't challenge India's food security measures before December 2017. In return, India has vowed to ensure that its policies "do not distort trade or adversely affect the food security of other [WTO] members", among a few other conditions.

By ironing out their differences on food security, negotiators paved the way for deals on two other topics that will have big impacts in the developing world. The first is trade facilitation, which could add $1tn to the global economy by cutting red tape – which tends to be at its thickest in poor countries – at border crossings. The second is a package of issues that are relevant to Least Developed Countries (LDCs); these include allowing LDC exports easier access to rich-country markets. Although the language in those texts has been diluted by years of bargaining, negotiators now appear ready to finalise both agreements.

But taking a step back from the nitty-gritty of the negotiations themselves, the biggest news to emerge from Bali is the mere fact that trade officials managed to agree on anything at all. For at least the past five years, as the global trade talks have continued to stumble, the WTO has appeared to be on a slow but seemingly inexorable slide toward total irrelevance. The organisation's Doha talks have barely made any progress since 2001, even as regional and bilateral trade agreements – which some see as more realistic alternatives to the global negotiations – have flourished.

But something changed in Bali today: negotiators proved that they could actually get something done. The so-called Bali package represents just a tiny fraction of the issues that negotiators set out to tackle in the Doha Round talks. But still, it's progress.

And who knows how many more breakthroughs Friday's agreement might inspire. The Bali package ends with a commitment for trade officials to develop a "clearly defined work programme" to tackle the remaining issues in the Doha talks. In time, that work could lead to progress on any number of issues that affect developing countries, including deeper cuts to rich countries' farm subsidies and easier access for developing country exports to foreign markets.

The WTO has long come under fire from anti-globalisation protestors, and such criticisms continue today, albeit to a lesser extent. But the WTO remains the only international economic forum in which developing countries are on an equal footing with their rich-country counterparts. Because all decisions at the WTO are taken by consensus, every country that takes part in the global trade talks has the opportunity to block a deal. The same cannot be said of the regional and bilateral negotiations that have become so popular of late.

So the WTO has lived to see another day, and perhaps another decade. Developing countries certainly have their work cut out for them in the negotiations that lie ahead. But progress, as we've seen, is at least possible; it just might take a dozen years to achieve.

The Doha Development Round was launched 12 years ago and it was a classic case of the World Trade Organisation biting off more than it could chew

The deal signed by the 159 members of the World Trade Organisation in Bali is a triumph. But only in the way that Dunkirk was a triumph for Britain in 1940. The WTO has avoided a calamity. It lives to fight another day as a body that can cut global trade agreements. But no more than that.

The package signed off is what's left of 12 years of haggling, wrangling and stalemate since the Doha Development Round was launched 12 years ago. It adds up to very little.

Trade negotiators set the bar high in Doha. They crafted an ambitious agenda which included freer trade in agriculture, manufactured goods, and services. Trade in environmental goods was included. Ministers pledged to update the WTO's rules to prevent dumping of low-cost products. In the event, it was a classic case of the WTO biting off more than it could chew. There were too many issues, most of them complex and contentious. The talks quickly became embroiled in power games. The expectation in 2001 was that rich countries would provide access to their markets for the agricultural produce of poor countries and in return developing countries would cut tariffs on imported manufactured goods from the west.

This tit-for-tat arrangement proved elusive. By the time Roberto Azevêdo took over at the WTO in the summer all that was left of the original Doha Round was trade facilitation, improving customs procedures to make it easier for goods to flow in and out of countries.

But even so-called "Doha lite" was put at risk when India and the US clashed over food security. New Delhi said it wanted the right to stockpile grain and sell it at cut-price rates to its poor citizens; the US said India had to abide by WTO rules on government food subsidies. India said there would be no trade facilitation deal until the terms of a "peace clause" had been secured. Friday's compromise allows India to keep its temporary arrangement in place for four years until a permanent solution is found.

Azevêdo's relief at the outcome will be tempered by the knowledge that it has taken two decades to negotiate this scanty deal. In the meantime, WTO members have been going their own way, seeking to sign bilateral agreements such as that between the EU and the US. The threat of WTO marginalisation remains.

As Churchill said after Dunkirk: "Wars are not won by evacuations."

Developing countries including India win concessions but critics say World Trade Organisation is no forum for helping the poor

The first global trade deal since the creation of the World Trade Organisation (WTO) nearly two decades ago was condemned by anti-poverty groups on Friday as a boost for big business at the expense of developing nations.

After 12 years of talks, an agreement drafted by WTO director general Roberto Azevedo was due to be signed by ministers from the body's 159 member countries on Friday night after last-minute concessions to India over food security.

An agreement with India, which has sought protection for its poorest farmers from US firms dumping surplus agricultural produce, was crucial to a comprehensive deal being struck at the meeting.

Barring any last-minute veto, the deal will be passed and aims to reduce red tape at customs, give improved terms of trade to the poorest countries, and offer developing countries leeway to bypass the normal rules on farm subsidies to feed the poor.

It would also revive confidence in the WTO's ability to negotiate global trade deals following a string of bilateral talks between the major trading blocs that have left the body at risk of collapse.

"We are very close," WTO spokesman Keith Rockwell said at the meeting on the Indonesian resort island of Bali. "As things stand now, the prospects are promising."

Tense negotiations in recent weeks ahead of the meeting followed 20 years of bitter disputes as developing countries have attempted to protect their fledgling agricultural and industrial sectors while allowing them access to markets in the rich west. The Doha round of talks, which began 12 years ago with high hopes of a deal, was considered to be dead as late as Thursday night by many delegates.

India, whose government faces the risk of losing elections next year, has said its tough stance drew support from developing countries in Asia, Africa and South America, though the meeting's host, Indonesia, pressed for it to soften its position.

"We are trying to get justice for the poor people," Indian trade minister Anand Sharma said as he entered the final day of the meeting.

India will implement a welfare programme next year to provide cheap food to 800 million people that was likely to contravene WTO rules curbing farm subsidies to 10% of production.

The programme, which relies on large-scale stockpiling and the offer to pay farmers a minimum price, is a central plank of the government's bid to win a third term.

Supporters of the WTO deal argue it will add hundreds of billions of dollars to the world economy. A report by the Peterson Institute in Washington argued it would add $960bn (£587bn) through extra trade and employment.

But the World Development Movement (WDM) warned it was "an agreement for transnational corporations not the world's poor".

Nick Dearden, director of the WDM, said: "On the positive side, developing countries have forced concessions on to the pro-corporate agenda of the US and EU. However, those concessions are only the minimum necessary to get through what remains a deal for corporations, not for the world's poor.

"Here in Bali, social movements, trade unions and campaign groups have supported the efforts of developing countries to get a deal which moves the agenda away from a pro-corporate charter and towards something that asserts the rights and needs of the majority of the world's population," he said.

"The aggressive stance of the US and EU means that we have moved only a little, and shows again that the WTO can never be a forum for creating a just and equal global economic system."

Dearden said a succession of planned bilateral deals on a range of goods and services threatened the WTO and represented "the biggest shift of power from people to corporations that we have seen in 10 years" and must be "halted in their tracks." The EU has recently begun talks with the Obama administration on a wide-ranging trade deal outside the confines of the WTO.

Critics of the deal also argue that the tortuous construction of clauses in the text make some parts of the agreement meaningless.

"The food security fix is something out of 1984, George Orwell would be proud," said Simon Evenett, professor of international trade at the Swiss University of St Gallen.

"The food security text is so contradictory that there must be an informal understanding among the big players as to what it really means."

Azevedo, a former Brazilian trade negotiator, told delegates at the start of the last day of talks that there was more work to be done, but sounded upbeat on prospects for success.

Rockwell said: "He told members they were now very close to something that has eluded us for many years and that the decisions over the next few hours would have great significance beyond this day."

Emotional end to talks in Bali, as WTO concludes first global trade deal in nearly 20 years

WTO concludes first global trade deal in 20 years but critics say it will boost big business at expense of developing nations

The first global trade deal since the creation of the World Trade Organisation (WTO) nearly two decades ago has been condemned by anti-poverty groups as a boost for big business at the expense of developing nations.

After 12 years of talks, an agreement drafted by the WTO director general, Roberto Azevêdo, was signed in Bali by ministers from the body's 159 member countries on Friday after last-minute concessions to India over food subsidies.

Azevêdo shed tears during the summit's closing ceremony on Saturday as he thanked the host nation, Indonesia, and his wife.

"For the first time in our history, the WTO has truly delivered" on large-scale negotiations, he said.

"This time the entire membership came together. We have put the 'world' back in World Trade Organisation," he said. "We're back in business … Bali is just the beginning."

An agreement with India, which has sought protection for its poorest farmers from US firms dumping surplus agricultural produce, was crucial to a comprehensive deal being struck at the meeting. The talks were also threatened at the 11th hour when Cuba objected to removal of a reference to the decades-long US trade embargo that Cuba wants lifted.

To head off a dispute, WTO members gave developing nations a temporary dispensation from subsidy limits, shelving the issue for negotiations at a later time.

At the heart of the agreement reached in Bali were measures to ease barriers to trade by reducing import duties, simplifying customs procedures and making those procedures more transparent to end years of corruption at ports and border controls.

Tense negotiations in recent weeks ahead of the meeting followed 20 years of bitter disputes as developing countries have attempted to protect their fledgling agricultural and industrial sectors while allowing them access to markets in the rich west.

The Doha round of talks, which began 12 years ago with high hopes of a deal, was considered to be dead as late as Thursday night by many delegates.

India, whose government faces the risk of losing elections next year, has said its tough stance drew support from developing countries in Asia, Africa and South America.

"We are trying to get justice for the poor people," Indian trade minister Anand Sharma said on the final day of the meeting.

India will implement a welfare programme next year to provide cheap food to 800 million people that would have contravened WTO rules curbing farm subsidies to 10% of production.

The programme, which relies on large-scale stockpiling and the offer to pay farmers a minimum price, is a central plank of the government's bid to win a third term.

Supporters of the WTO deal argue it will add hundreds of billions of dollars to the world economy. A report by the Peterson Institute in Washington argued it would add $960bn (£587bn) through extra trade and 20m extra jobs.

John Cridland, head of the Confederation of British Industry, said commitments to streamline customs procedures and cut red tape would help British exporters to move their products more efficiently around the world.

"With many British businesses looking further afield at new export markets, this deal is good news," he said..

"Now we need to see ambitious bilateral trade and investment agreements with the US and Japan to provide an additional boost to UK export performance over the long term."

But the World Development Movement (WDM) warned it was "an agreement for transnational corporations not the world's poor".

Nick Dearden, director of the WDM, said: "On the positive side, developing countries have forced concessions on to the pro-corporate agenda of the US and EU. However, those concessions are only the minimum necessary to get through what remains a deal for corporations, not for the world's poor.

"Here in Bali, social movements, trade unions and campaign groups have supported the efforts of developing countries to get a deal which moves the agenda away from a pro-corporate charter and towards something that asserts the rights and needs of the majority of the world's population," he said.

"The aggressive stance of the US and EU means that we have moved only a little, and shows again that the WTO can never be a forum for creating a just and equal global economic system."

Dearden said a succession of planned bilateral deals on a range of goods and services threatened the WTO and represented "the biggest shift of power from people to corporations that we have seen in 10 years" and must be "halted in their tracks."

The EU has recently begun talks with the Obama administration on a wide-ranging trade deal outside the confines of the WTO.

Critics of the deal also argued that the persistent disputes wrecked any chance of a far-reaching programme of reform.

"Beyond papering over a serious dispute on food security, precious little progress was made at Bali," said Simon Evenett, professor of international trade at the University of St Gallen in Switzerland.

"Dealing with the fracas on food security sucked the oxygen out of the rest of the talks."

The WTO was formed in January 1995 after the Uruguay Round trade negotiations spanning 1986-94 were completed.