World Trade Organization (WTO)

World Trade Organization (WTO) is the only international organization regulating international trade. It was founded in 1995 and operates based on a series of agreements negotiated and approved by the majority of states in the world and then ratified by the parliament. The objective of these agreements is to assist producers, exporters and importers of goods and services in conducting their business.

Establishment of the WTO was initiated with a negotiation known as the "Uruguay Round" (1986-1994) and previous talk under the "General Agreement on Tariffs and Trade" (GATT). The WTO currently consists of 153 member states, and 117 of them are developing countries or separate customs areas. The WTO is now serving as a forum for a number of new agreements under the "Doha Development Agenda" (DDA) which was initiated in 2001.

Decision making inside the WTO is generally carried out based on a consensus by all the existing member states. The highest WTO body is the Ministerial Conference (MC) which is held once every two years. In between the MCs, decision making activities are done by the General Council. Under the General Council are subsidiary bodies, which include councils, committees and also sub-committees, assigned to implement and supervise implementation of WTO agreements by member states.

The foundation and basic principle of the WTO constitute efforts toward border transparency, guarantee over the "most favored-nation principle" (MFN) and non-discriminating manner by and among the member states as well as commitment to transparency in each and every activity. Opening national market to international trade with proper exception or adequate flexibility is viewed to be encouraging and favoring sustainable development, promoting welfare, eradicating poverty, and establishing peace and stability. At the same time, this openness should be accompanied with suitable national and international policies which contribute to economic growth and development based on the need and aspiration of each member state.

Related to the DDA, Doha MC in 2011 has mandated the WTO member states to organize a round of negotiations that aims to establish multilateral trade governance which has a developmental dimension. Such governance will provide developing countries and LDCs with opportunities to utilize international trade as a source of funding for development in their country. The negotiation addressed some major issues, including agricultural issues, Non-Agricultural Market Access (NAMA) and rules of trade in services. As it progressed, the agricultural issues, especially regarding the domestic subsidy and tariff on agricultural products, determined the course of the negotiation. For the majority of developing countries, agricultural issues are strongly associated with socio-economic issues, such as food security, livelihood security and rural development. Meanwhile, for developed countries, granting domestic subsidy has an important political dimension to their agricultural policy.

However, the DDA negotiation did not proceed smoothly due to differences in bargaining position of member states concerning a number of sensitive issues, especially regarding agriculture and NAMA. After experiencing some failures that led to a suspension in June 2006, the negotiation process fully resumed at the beginning of February 2007. In the hope of reaching an agreement on agricultural modality and NAMA, a negotiation on ministerial level was held in July 2008 to address single-undertaking issues, such as issues of services, intellectual property, development, and dispute settlement. However, this negotiation also faced a failure.

The 7th WTO MC in November 2009 has instructed the member states to finish the round of negotiations by the end of 2010. This allows them to renew their commitment to actively and constructively resume the negotiation as well as to implement their political commitment into concrete actions.

During his speech in the Annual Session of the Parliamentary Conference on 22 March 2011, the Director General of WTO, Pascal Lamy remarked that the WTO should finish the Doha Round as soon as possible. The Doha Round has been launched since 2001 and is now entering its critical phase known as the "last window of opportunity". He highlighted that the rules based component is as important as the element market access, albeit the former gains little media attention. It can be seen from the cases of trade dispute submitted to the WTO which are often based on the rules of trade and not on the subsidy or tariff commitment.

As an effort to finish the Doha Round, strategic measures have been set. These measures will direct the Leader of each Trade Negotiations Committee (TNC) to determine the level of achieved negotiation progress by creating a tabulation of compromise text drafts. It is expected to be done by the end of April. Information on the level of progress serves 2 basic objectives, namely to provide inputs regarding the gap that needs to be resolved by the end of the Doha Round and to encourage the Doha negotiation phase to enter a more horizontal or parallel phase.

Pascal Lamy reiterated his commitment to urge the final text of Doha Round trade negotiation (as reported in the WTD on 28 March 2011). He also said that sectoral discussion regarding tariff on industrial goods could be the key to finishing the Doha Round. However, judging from the substantial differences among the member states, several member states like Argentina, Australia, United States, Mauritius, Norway, Brazil, Canada, India and South Africa proposed to postpone the issuance of the said text.

During the informal meeting of Trade Negotiations Committee on 29 March 2011, the Director General of WTO stated that to make progress in sectoral negotiation on Non-Agricultural Market Access has been a major challenge. Therefore, he is committed to hold a consultation with several member states of the WTO starting from 4 April 2011 in order to understand the size of the gap in NAMA, and he intends to report the result of this consultation in front of all members of the WTO.

Indonesia in the WTO

Indonesia's involvement and position in the DDA negotiation process are founded on the national interest to encourage economic growth and poverty eradication. In order to attain stronger bargaining position, Indonesia joins in several coalition groups of developing countries, such as the G-33, G-20 and NAMA-11, whose interests are more or less similar to Indonesia's. Indonesia has been actively involved in these groups' formulation of collective stance that prioritizes accomplishment of development objectives of the DDA.

Indonesia, acting as the coordinator of G-33, continues to demonstrate its commitment and leadership through routinely holding a series of technical officials and Ambassador / Head of Delegations meetings, Senior Official Meeting and Ministerial Meeting in or outside of Geneva in order to formulate agreements that provide room for the developing countries to protect powerless and underprivileged farmers. As a coalition of developing countries, the G-33 rises to be a group of significant influence upon agricultural negotiations, and the current number of member grew to 46 states.