Negotiators came close but failed Tuesday to clinch a free-trade deal that could have helped boost the world economy by $1 trillion a year and cleared the way for a broader global agreement.
Diplomats from the World Trade Organization’s 159 members had been trying to forge an agreement before a trade ministers’ meeting next week in Bali, Indonesia. Achieving a deal in Bali is seen as a final effort to revive a broader 12-year effort to ease global trade rules.
The mini-deal discussed in Geneva had been intended, in part, to reduce delays and inefficiencies at national borders. Making it easier to move goods across borders could boost the global economy by nearly $1 trillion a year and support 21 million jobs, according to a report co-written by Jeffrey Schott, a senior fellow in international trade at the Peterson Institute for International Economics.
The lack of a global deal hasn’t prevented individual countries from seeking agreements among themselves. But experts say the failure to reach a global deal leaves poorer countries worse off.
“This should be a no-brainer for developed and developing countries,” Schott said.
Deputy U.S. Trade Representative Michael Punke expressed “a great deal of sadness” over the failure in Geneva. “We’re worried — alongside so many in this room — that a once-in-a-generation opportunity may have slipped our grasp,” Punke said.
Schott said he’s hopeful that negotiators will salvage the deal in Bali and restore the efforts to achieve a broader trade agreement. “If this small test can’t be passed, there’s very little reason for confidence” negotiators will ever reach the broader agreement, Schott said.
Some poor countries are demanding economic and technical assistance before they sign on. India is holding up a deal by insisting on protections for its farmers.
The WTO chief, Roberto Azevedo, said so much disagreement remains that several more weeks of negotiations cannot bridge the gaps.
Negotiations toward a broader global trade deal began in Qatar in 2001, and the agonizing pace of talks frustrated Azevedo’s predecessor, Pascal Lamy.
Still, some developed countries are seeking to reach side deals. The European Union, for example, has signed free-trade pacts with South Korea and Canada. The EU is also holding separate talks with the United States and Japan.
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