At Castlestone Management we’ve
been watching the World Trade Organisation deal negotiations over the past few
weeks. This is because the type of deal currently under negotiation is the sort
that could impact the global economy. Any activity that affects things on a
global scale is bound to eventually have an effect on long term investment
opportunities. The last time we visited this issue on the CastlestoneManagement Blog the deal was under doubt. It seemed that negotiations had come
to a standstill. However time moves very quickly in the financial world. This
week the deal seems much closer to actuality
However there is still a problem.
This problem focuses around Asian nation India. It’s reported that
representatives from the sub-continental nation are currently holding out on
the deal due to food subsidies. They have insisted that they are willing to
compromise on a policy subsidising food for hundreds of millions of poor. This
has put them at odds in the negotiations with more developed countries such as
the US
The negotiations are currently in
their final stages and are currently taking place at the WTO convention in
Bali. This meeting has brought together nearly 160 member countries of the WTO
in what would prove to be a landmark global trade deal. The deal has undergone many setbacks. There were also fears that
without this deal the WTO would fade into irrelevance; that it wouldn’t fulfil
its original remit. However officials are now much more optimistic about the
deal going ahead
Commenting on the current state
of the deal to reporters, WTO spokesman Keith Rockwell said that “we are very
close” to finalising the deal. Furthermore he said that "as things stand now, the prospects are
promising." Vague as they may be
these statements are a welcome change from the day before. This was when the
deal that was thought would add billions to the global economy was in danger of
collapse
He then turned his attention to a speech made by WTO
director-general Roberto Azevedo, a former Brazilian trade negotiator. He said
of the speech that "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."
Only time will tell on whether the deal goes ahead or not. However if it
does it will add billions to the global economy. This means it will have an
effect on all areas of finance, even long term investment. At CastlestoneManagement we’ll be watching to see how this plays out.
