WTO talks collapse

What a difference a few years make! Five years ago it was looking pretty ugly on the international trade front. The FTAA had a full head of steam, and was Bush’s top foreign policy priority …  at least until 9/11 happened. The post-9/11 climate led to a full court press by the US and EU on Southern countries to launch a new round of international trade negotiations – to “save” the global trading system, especially after the failed attempt to do so in Seattle, 1999. After lots of arm twisting, and at the final moment steam-rolling India, the new round was launched in November 2001, and given the lofty title of the Doha Development Agenda.

Insiders knew this was not about development, and time proved them right (see article by Stiglitz). There were still gripes from South that rich countries had not lived up to their commitments in the Uruguay Round; these were built into the new Doha Round. For the South, it is unfortunate that Doha never lived up to its promise. But they held their ground well and avoided being trampled in Cancun in 2003 and this year. In the end, it was the US, unable to cut its massive agriculture subsidies, that broke the deal. (I’m in favour of countries using subsidies to support domestic producers but not exporters; the latter results in Southern being undermined by dumped foreign products.)

But keep your eye on the ball. Talks seemed dead after Cancun as well, and were later revived. There are also some parts of the negotiations, like the GATS (General Agreement on Trade in Services) that are part of an ongoing liberalization agenda that were lumped into the Doha Round but that could continue on an independent track. In particular, there have been some disturbing proposals in the GATS negotiations around restraining countries’ capacity to regulate in the public interest.

In the meantime, let’s break out the bubbly for the collapse of these talks, even if temporary. These talks had little to do with trade in aid of development, but were really about reinforcing a pattern of trade rules that benefitted global corporations at the expense of democratic decision-making. (Over at Beat the Press, Dean Baker will give you an earful about how trade rules around patents and copyright are the antithesis of free trade.)

Here’s the BBC’s take:

Europe blames US for WTO failure

EU Trade Commissioner Peter Mandelson has blamed the US for the collapse of the latest round of global trade talks. US conditions attached to cutting farming subsidies were “unacceptable” for developing countries, he said.

But the US said it was “fully committed” to the talks and blamed Europe for its lack of ambition over reaching a deal to cut farming tariffs.

After assessing the situation, the World Trade Organization (WTO) decided no more talks should be attempted.

“We will certainly not conclude the round this year,” WTO director general Pascal Lamy said.

That could mean even further delays to the so-called Doha round of talks which began in 2004.

‘Missed opportunity’

Negotiators had been hoping for a deal this year before the special authority US President George W Bush has to negotiate trade deals expires, making it harder for him to win congressional approval for a treaty.

Mr Lamy warned that the richer members of the WTO must now keep the negotiation process going, saying: “We have missed a very important opportunity to prove that multilateralism works.”

EU Commissioner Mandelson said he was “profoundly disappointed” that talks had stumbled, mainly as a result of America’s inflexibility.

 

“What they’re saying is that for every dollar that they strip out of their trade-distorting farm subsidies they want to be given a dollar’s worth of market access in developing country markets,” he said.

“That is not acceptable to developing countries and it’s a principle that I on Europe’s behalf certainly couldn’t sign up to either.”

US trade representative Susan Schwab insisted the US remained “fully committed to multilateral trading system”.

But she said that “a number of developed and advanced developing countries were looking for ways to be less ambitious, to avoid making ambitious contributions”.

Meanwhile, Senator Charles Grassley, chairman of the Senate finance committee that would have to approve any trade deal, backed the stance of the US trade negotiators.

“I’ve always said that no deal is better than a bad deal, and a ‘Doha light’ deal would be a bad deal,” he said.

“I’m glad our trade negotiators held their ground.”

‘Terrible blow’

The EU, US, Brazil, Australia, India and Japan have been negotiating a deal to boost world trade in industrial and agricultural goods.

Charity Christian Aid said that the collapse of talks struck “a terrible blow” for the world’s poor.

It had removed the most important weapon in the fight against global poverty, the charity’s senior trade analyst Dr Claire Melamed said.

 

But John Hilary, director of campaigns and policy at War on Want, said the collapse was good for the world’s poor.

“Any chance of a genuinely pro-poor outcome was lost long ago, and the deal on the table would have caused great damage to developing countries,” he said.

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