CHALLENGES AND OPPORTUNITIES IN THE IMPLEMENTATION OF WTO BALI PACKAGE FOR THE DEVELOPMENT OF DEVELOPING COUNTRIES

Rangga Kharisma Muhammad20120510096

International Program of International Relation Social and Political ScienceMuhammadiyah University of Yogyakarta

10Muhammadiyah University of Yogyakarta

BackgroundIn the fast changing era of this world every state in need to adapt in order to follow the development of the world. One of the most advance developments of this world is about how this world is work. As we know that in the end of the cold war 1971, there were a war of idea and prestige between two huge pole at that time United State and Uni Soviet. United State can take the first podium of the world stage, marked with the collapse of Uni Soviet which is divided into several small states. With that triumph United States try to spread out their ideas about liberalization in every corner of this world.So in order to following the development of the world state need to follow the only big power at that time. State need to choose their governmental foreign policy, whether to choose the liberalization or not. They can choose opening liberalization to some state or all state, or just open the liberalization for some sector in state economy or all sectors. It depends on the state government.One of the content in the liberalization is the implementation of free trade. Free trade is one of the development of liberal economic ideas especially in international trading system which is must implemented by a state in order to promote world economic growth. So state can get fresh money in order to develop their own Nation. Free trade itself is about openness in export and import goods between states also reducing any trade dispute.In the trade relation there must be lot of dispute. So that is why there is an institution which is controlled the trade condition between states called World Trade Organization (WTO). But even WTO already establishes in order to control trade relation between state disputes between them is still exist. WTO need to keep develop and modify it rules in order to followed the development of this world so the function of World Trade Organization which is to reduce any kind of dispute and promote mutual economic growth can run smoothly.One of the developments in this current situation about WTO system is the ratification in the current forum called Bali package. That Forum was held in Bali, Indonesia started on 3 December 2013 and planned finish on 6 December 2013 but unfortunately because of some unpredicted situation this forum need to delayed until 7 December 2013. Bali was chosen by WTO to held this international ministerial conference forum by WTO and 160 minister was meet in the Nusa Dua, Bali to discuss about several multilateral trade issue, but generally that agreement have a point to erasing any trade barriers, tariff and non-tariff, also about trade transparency in order to develop trade system in this world so there will reduce any risk in the trade relation between state. The Bali deal was historic. It is the first multilateral trade agreement achieved by the WTO since it was created in 1995. And it comes after 12 years of protracted negotiations over the Doha Development Round. Bali package clearly stop never-ending talk in the Doha round.This meeting is the continuation of Doha round which do not have any huge impact in multilateral trade activity. It can be said Bali package is a part to reconstruct Doha Development round which held in Qatar So in order to make WTO credibility in the world forum back on stage which was broke after the failure of 12 year Doha development round trade talk this forum need to be succeed. Every government has their own capacity to make a link between their regional conditions toward global economy. Every state have a different moment in history they also have a different domestic politics, economic, and social condition which make them tend to have a different result of foreign policy. Some of them close their domestic economy, some of them open their market, and some of them have a strict limit on trade. That is make some times a strategic move by a state is unpredictable, and so that is why such international agreement which try to unite all of state interest is not easy as we thought.If we see more deeply about the domestic condition of a state which influence the result of foreign policy it is very complex. Each people in society have their own perspective in the governmental foreign policy setting of international trade there are pro and contra toward international trade agreement. It is about who get what, when, and how. So it is depend on the political institution of government which governs policy making who decide a better policy for every one of them.In the Bali package Forum it was not run smoothly, with the issues of food security which propose by India, this forum need to postpone for some days. India instead does not mean to interrupt or disrupt Bali package itself. India in this case try to think as a rational actor, try to work as it should be, a state which prosperous their country. Like i said before foreign policy which propose by state itself is according to their domestic condition. As we know that India is one of developing state which really depend on their agriculture product, which is mean that if Bali package just implement in their state it will not close the possibility that it will killing their own farmer, and people. India in this condition was having a different perspective with United State, and another develop countries which are insisted about food regulation. They insisted Uruguay round need to implement again in the food trade but India still insisted. Then United State and another develop state was reducing their demands with giving permission for state to give 10% subsidize in their agriculture sector but India still insisted to increase their demand. Even until United State and develop state was rising it is subsidize until 15% and valid for 4 years, India still insisted about their demand. There is no time validation about food subsidizes. Finally with the toughest of India in the behalf of to protect it state, to prosperous their citizen, they win their proposal. Develop State agree with India proposal about agricultural subsidize, develop State also agree another proposal from Latin America about agriculture nondiscrimination on export and subsidize to their agriculture factor without any limitation and exceptions. All of that was already ratified by develop state said ex-Prime Minister Gita Wirjawan.[footnoteRef:1] [1: Muliarta, WTO Capai Kesepakatan Perdagangan Global di Bali http://www.voaindonesia.com/content/wto-capai-kesepakatan-perdagangan-global/1805665.html]

So how about Indonesia, Indonesia is one of state which proposed high level of ministerial conference Indonesia also is the house country of the high level ministerial conference under the auspices of WTO. Indonesia is one of the state which really support the implementation of Bali Package even there is several protest from scholars, Non-governmental Organization, they held several demonstration toward this conference. They are pessimistic about the content of the Bali package itself, they believe this conference will become a new imperialism in the developing country especially. They believe this forum bring something worst for developing countries. They are condemn Indonesia position be a doll of United State moreover they condemn Indonesia action which is be a seducer party to persuade India ratified the treaty as soon as possible. Then as we know that Indonesia itself was not so far different from India which really depends on the agriculture factor. It means that if Indonesia just ratified the treaty and India not do anything toward the agreement it could be kill Indonesia agriculture. So then why Indonesia need to have a different action in the first place with India. Indonesia not followed India with their proposal that propose food security in order to safeguard their citizen, the system which propose by India is a trade which guarantee the prosperity for its people. So I will analyzes the diplomatic action and role which was did by Indonesia in Bali package forum, what is the motivation behind it, why Indonesia rather support West Country in aggrement rather than followed India which is basically have a common production factor.Research QuestionHow is the diplomatic role of Indonesia in the Bali Package implementation especially when compare to the India diplomatic role, is it bane or boon for Indonesia when implement this agreement?TheorySo in order to explain the phenomena in Ministerial conference in Nusa dua Bali, then in this topic I will use the theory of Rational Choice, and Neo Liberalism. Rational ChoiceRational choice itself was famous after the war was finished one of the scholars who introduce the use of Rational Choice theory in a wider area was Garry Becker which get a Nobel memorial prize in his book of Economic Approach to Human Behavior (1976) and A Treatise on the Family (1981), Becker, who won the Nobel Prize for Economics in 1992, made innovative applications of rational choice theory.[footnoteRef:2] [2: Rational Choice Theory, http://www.britannica.com/EBchecked/topic/1069691/rational-choice-theory, ]

Rational Choice is one of the political economy approaches. There are some schoolars who study about Rational Choice approach, such as Gordon Tullock, Manchu Olse, James Buchannan, Anthony downs, and more. These scholars and its followers try to use economy model of analysis used in Politic, they want to use science to analysis the behavior of politic man. They said Human is Political Man (Homo Politicus) but was headed to the Economic man (Homo Economicus) because they sees there are link between Political Factor with Economic factor, especially in the public decision making. They believe we can predict human decision with knowing their interests from involved actor. So the point from politic according to them is individual is the most important factor in the world politics. As a rational man they are goal seeking or goal oriented which is reflect what they consider as their own interest. They do that in a limited resources situation.[footnoteRef:3] [3: Prof. Miriam Budiardjo, Dasar-Dasar ilmu politik, PT. Gramedia Pustaka Utama, Jakarta hlm . 93]

Because this approach is come from economic approach which mean try to maximizing the benefit and reducing cost, as well as in Politic, they try to maximizing benefit which option is best for individual. They try to find the most efficient way to achieve their goal. This approach is derived from Neo realist perspective, which believe this world was anarchy so state have their role to be a dominant actor in terms of maximize their national interest. Neo realist believe there are no dominant actor even international institution which can rule the state, state need maximize their capability in terms to survive. So that is why a state will act rationally when they are having a negotiation with another state. In Neo realist also believe about cooperation but cooperation will run smoothly when both parties get mutual benefit from that. But if that cooperation there is no harmonization between parties or there is no mutual benefit there will be a conflict. This theory believes that national interest is above everything.Rational Choice actor such as economic actor, politician, beroucrate, fundamentally is egoistic they try to look for the most efficient way to achieve their goal. Interest optimization and efficiency is a core of this theory.[footnoteRef:4] [4: Ibid,. ]

We will see the behavior of India why India did such action in the negotiation?, why India should give a food subsidize toward it citizen?. India have a demand for agriculture subsidize increase from 10% until 15% also have a demand to change price reference not using price in Uruguay Round in 1986-1988 but need to use a new price regulation. When India propose it proposal toward food subsidize of course India have it own reason. With this theory it will help us to analyize the condition why Indonesia cannot be the actor who proposes the food subsidize proposal. If compared to India both of country have a same background in economic problem. Moreover Indonesia itself is a host country of this WTO high level ministerial meeting. So why in the first place when the WTO proposal about reducing tariff and non-tariff barrier Indonesia not do their diplomacy role for its people and just supporting the condition of WTO proposal position while India insisted in every way to hold their proposal.Neo Liberalism IntuitionalismNeo Liberal Institutionalism is very attractive approach for scholars because this is a critical approach toward neo-realist especially when issued about international institution and cooperation. This is actually deriving from Neo liberal approach but because of the interest in the institution, regime, organization this approach also called as Neo Liberal institutionalism. Actually these approaches have a similar meaning with neo realist approach but the difference is only the optimism. Both of theories believe this world is anarchy, and a state is a key role. But Neo Liberal is more optimistic toward cooperation, because of this world is anarchy so thats why international community need cooperate not only to gain a peace or word security but also to gain a sustainable economic development with making an economic international system. To reducing any dispute risk so thats why this this cooperation need to facilitate by international institution.Neo liberalism is focusing on the power of state, but in the Neoliberal institution believes in the power of international institution. Because of the development of Neo liberalism after cold war, the interdependency between state was significantly increase and states need any third party or regime in order to control it cooperation, then because of the development interdependency between state was increasing significantly make Neo Liberalism also define as Neo institutionalism. This theory was stated by Robert Keohane and Joseph Nye both of that sholars is have a signifact role in the development of this theory.According to the Robert Keohane Neo liberals institutionalism was focusing on International Institution. International institution here is have a rule, norm and values which state can followed that rules. So international institution is become an answer for state to get their interest and find the solution toward it differences. But need to remember according to Robert Keohene international institution is not above state, they do not have any authority to force state to implement their policy in their domestic condition. Even sometimes this condition make a little bit conflict for international institution because of the interest differences between state which make state tend to have a different demand to the international institution.Neoliberal itself is emphasize on international institution as a mediator or third party so every state can work and cooperate together in international system. Neo Liberal institution is concerning on the problem of international issues of world governance. So Neo Liberal institution is believe work and cooperation together can facilitate by international institution and make sure the cooperation toward mutual benefit trough international trade and development.In Neo Liberal institution it not only controls International politics, security but also economic so in this case these international institutions try to control any international activity in order to gain a sustainability world economic development. In this research the international institution itself is WTO (world trade organization) which has a function to control any trade especially when focusing on promoting free trade. WTO itself was derived from Uruguay round negotiation that conclude on 15 December 1993, and it come into existence on 1 January 1995.[footnoteRef:5] In Uruguay round also include the series of agreements that established rules dealing with agriculture, services, textiles and clothing, intellectual property, as well as a number of other issues related to trade.[footnoteRef:6] So WTO is described as a body which consist of rules and agreement which control any international trade issue, backed up by juridical system and minimum of political structure [5: John Ravenhill, Global Political Economy, Oxford University press, page 106] [6: Ibid.,]

the establishment of WTO is state of consciousness, state realize that because of the development of trade relation of state and the development of dependency between state there is need an organization to promote and control any trade rules and backed up that trade rules with powerful dispute settlement system. So in this case WTO itself tries to be a facilitator for international economic growth by promoting international trade the system known as free trade system. So in the previous high level ministerial meeting held in Nusa dua bali the proposal tend to gaining social prosperity for people especially people in LDCs less developing countries by promoting free trade with reducing any trade barriers in every sector.

Research PurposeThe purpose of this research is to understand current implication condition of WTO forum which is held in Nusa dua, Bali toward Indonesia condition, this research also try to analyze the motivation behind the role and action which is did by Indonesia in the Bali package.So hopefully this research wills increase the knowledge of the writer. The writer also hope can give a significant impact to the International Relation thought especially in the political economy sphere then it will be reference for a policy maker in another event so which is hopefully do not make any policy that harm our national condition. then hopefully this research will use by any scholars which is have a same interest in knowing the implication and Indonesia motivation toward it action in Bali package. So this research can be as information for International Relation student also International Relation studies observer to be used as a reference. MethodologyResearch typeIn this research I will use a descriptive-analysis method in explaining a case. The result of this research is use to explaining the real condition of some social phenomena which is analyzed deeply according to the fact and reality. The writer uses this method in order to understand the phenomena which happen and can match it to the concept of the research.Research strategyThis research using Qualitative research methodology, this is a research strategy which is usually emphasize word rather than quantification in the collection of data. Qualitative research focused on key features of research design that may identify a study as qualitative, including a concern with what why and how questions rather than how many, a focus on processes, and the flexible nature of qualitative research design.[footnoteRef:7] [7: Jane Ritchie and Jane Lewis, Qualitative Research Practice: A Guide for Social Science Students and Researchers, London: Sage Publications, 2003, hal. 3]

So with using this research strategy it will help writer to explain the condition in the phenomena which happen in the WTO high level ministrial meeting also the implication to Indonesia and can match it up with the theory that the writer use.HypothesisAccording to Condition which is i give in the background and correlate it the theory which is assume can explain the motivation of Indonesia in it action in the high level ministerial meeting of WTO in Nusa Dua, Bali. And Compare to what India did in the Forum. If we take the hypothesis of this research based on theory I give, I will take the red line behind it to consider is it bane or bone to Indonesia condition nowadays.1. It is rational for India to do such action in the high level ministerial meeting in Nusa Dua, Bali, according to India background. It is to protect it is own people which is depend on their agricultural production.2. The motivation of Indonesia action in the forum could be Indonesia try to gain Image in International Community especially in the West that show Indonesia is one of State which has a role in the World Trade development. Indonesia also want to keep the relation with every state in the Forum.3. Bali package could be a bane of Indonesia if India not fight their right to protect it agricultural factor which also will effected to another development countries. As we know that the main function of International Institution is for facilitate it member and managing it member demand. Not only include certain parties. Because we realize that not all state have a same economic condition so that is why each state need to fight it right and international institution according to it is function have a responsibility to facilitate it without any injustice.

1Muhammadiyah University of Yogyakarta