The spirit of compromise and political will that yielded the first multilateral trade agreement under the World Trade Organization (WTO) has proven insufficient to see the so-called "Bali Package" through to formal adoption and implementation. The December 2013 Bali Package is a three-part "early harvest" of the Doha Development Agenda (DDA) covering trade facilitation, agriculture, and development issues. The Trade Facilitation Agreement (TFA), which aims to cut red tape on international transit of goods, is the key element of the Bali Package. The TFA alone promises to eliminate some $1 trillion in trade friction that remains in the global trading system today. For more information on the Bali Package, please see our coverage in the January 2014 issue.

On July 31, the WTO missed the deadline set by world trade ministers in Bali for the adoption of the protocol of amendment on the Trade Facilitation Agreement. Although Members continue consultations aimed at resolving remaining roadblocks to the formal adoption and implementation of the Bali Package by the WTO, there is no clear path forward to resolving one of the key roadblocks to implementation. India has been seeking to link the implementation of the TFA to a permanent solution on public stockholding for food security purposes, maintaining that public stockholding programs should not be subject to subsidies disciplines under the Agreement on Agriculture. A four-year peace clause was agreed to at Bali. The peace clause would shield public stockholding programs from WTO dispute settlement until a permanent solution could be found—a goal that Members presumed could be achieved by the end of 2017.

It is unclear exactly what additional commitments on public stockholding India is now seeking before it lifts its objections to moving forward with the TFA. Both the United States and the European Union have made clear their willingness to clarify the agreed-upon peace clause and possibly agree to increased meetings on food security issues. They are unwilling, however, to modify the Bali Package commitments. The U.S. and EU position reportedly has the support of other Members, and India appears so far unable to garner the support of other developing nations on this issue. In recent meetings on the subject, no Members spoke in support of India.

In a recent speech to the UNCTAD Trade and Development Board, WTO Director-General Roberto Azevêdo indicated that Members remain at an early stage of consultations to find a way forward. We expect consultations to intensify in the run-up to the next meeting of the Trade Negotiations Committee, which is scheduled for October 6.