The first major global trade deal in nearly 20 years was struck Saturday as 160 countries agreed on measures that could boost the world economy by as much as $1 trillion.
The deal was struck at a summit on the Indonesian island of Bali. At the heart of the 'Bali Package' is an agreement to simplify customs procedures and speed up the flow of goods. It's the most significant multilateral trade pact since the World Trade Organization was formed in 1995.
The package could cut the costs of trade by 10-15%, according to the OECD, by slashing paperwork and easing border delays and transit bottlenecks.
Developing nations could save as much as $445 billion a year, and over time the deal could generate bigger benefits for the global economy by increasing trade flows, revenue collection, and boosting investment.
The Bali agreement also allows developing countries to continue to stockpile food to sell at subsidized rates to the poor.
The deal breathes new life into the WTO, an organization many had written off over its failure to conclude a much more comprehensive global trade deal known as the 'Doha Round,' which began in 2001 and made very little headway since 2008.
President Obama applauded the agreement, saying in a statement it "represents the rejuvenation of the multilateral trading system that supports millions of American jobs and offers a forum for the robust enforcement of America's trade rights." He added that "small businesses will be among the biggest winners, since they encounter the greatest difficulties in navigating the current system."
As recently as Wednesday, Europe's top trade official Karel de Gucht warned that failure in Bali would have dealt a fatal blow to the system of global trade rules.
"We have put the 'World' back into the 'World Trade Organization'," said Roberto Azevedo, a Brazilian diplomat who succeeded Pascal Lamy as head of the WTO in September.
"The decisions we have taken here are an important stepping stone towards the completion of the Doha round."
Frustrated by the snail's pace in multilateral negotiations in recent years, countries had been giving greater priority to bilateral or regional deals to reduce barriers to trade. The United States and European Union are due to begin a third round of talks on the Transatlantic Trade and Investment Partnership in Washington later this month.
And many of the officials who took part in the Bali summit flew straight to Singapore Saturday for talks on finalizing the Trans-Pacific Partnership.
Twelve countries -- Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam -- are taking part in the TPP talks. Together they make up 40 percent of the global economy.
Beset by mountains of debt and subdued growth, governments have turned to trade liberalization as a "cost-free" way of giving their economies a boost.