CHALLENGES AND OPPORTUNITIES IN THE

IMPLEMENTATION OF WTO BALI PACKAGE FOR THE

DEVELOPMENT OF DEVELOPING COUNTRIES

Rangga Kharisma Muhammad

20120510096

International Program of International Relation

Social and Political Science
Muhammadiyah University of Yogyakarta

Background
In 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.
2

Muhammadiyah University of Yogyakarta

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.1
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, Nongovernmental 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

1 Muliarta, WTO Capai Kesepakatan Perdagangan Global di Bali

http://www.voaindonesia.com/content/wto-capai-kesepakatan-perdagangan-global/1805665.html

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 Question
How 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?

Theory
So 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 Choice
Rational 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.2
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.

2 Rational Choice Theory, http://www.britannica.com/EBchecked/topic/1069691/rational-choicetheory,

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.3
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.

3 Prof. Miriam Budiardjo, Dasar-Dasar ilmu politik, PT. Gramedia Pustaka Utama, Jakarta hlm . 93

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.4
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 Intuitionalism
Neo 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
4 Ibid,.

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 1995.5 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. 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
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.

5 John Ravenhill, Global Political Economy, Oxford University press, page 106
6 Ibid.,

Research Purpose
The 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.

Methodology
Research type
In 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 strategy
This 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.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.

Hypothesis
According 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.