Accessibility links

Global Trade Goals in Danger With Collapse of  WTO Talks


International trade talks have collapsed, stalling five years of effort to ease poverty in developing nations by liberalizing global commerce. The impasse may mean trade will become more complex and expensive, especially for nations that can least afford it.

World Trade Organization Director-General Pascal Lamy made it clear there is little hope for a trade deal this year, after key trading powers put negotiations on indefinite hold.

"How long a time out? The end of the time out can only come when members are ready to play ball," he said. "But that ball is clearly now in their court."

Since 2001, the members of the World Trade Organization have debated how to achieve the goals set at a conference in Doha, Qatar. The Doha Development Agenda's main aim is to bring the benefits of greater trade to the world's poorest countries.

Just last December, at the WTO ministerial conference in Hong Kong, it appeared differences were narrowing. The United States and the European Union granted more market access to the world's poorest countries, and there was optimism that the framework for a final deal could be reached by the end of April.

But then talks bogged down in key areas. First, agriculture: Major agricultural exporters, including some developing nations, wanted rich governments, such as the U.S., the EU and Japan, to open their markets by cutting farm subsidies and tariffs.

But the rich countries could not agree on cuts to farm supports. EU Trade Commissioner Peter Mandelson was blunt.

"We do not have in place the once and for all multilateral program of fundamental reform of farm subsidies in the rich world that should be the centerpiece of this round," said Mandelson.

On the other side of things, the EU, the U.S., and other developed countries wanted developing nations, especially growing trade powers such as India and Brazil, to open their markets to imported industrial goods and services.

Indian Commerce Minister Kamal Nath said those demands did not end trade practices in many rich countries that make it harder for poor countries to enter markets.

"We say, correct the distortions. There should be fair trade, not only free trade," he said. "And they say if we get the market access of the kind we want, then we will remove the distortions. There is no equity in that."

He says India will now focus its energy on regional and bilateral trade agreements.

Trade experts say many countries are likely to do the same. But Keith Rockwell, the WTO's spokesman, says regional and bilateral deals do not address global trade problems.

"Things like agricultural subsidies just won't be addressed. The sort of global network of services agreements that are so important to telecom companies, express delivery companies, insurance companies - that disappears," Rockwell commented.

Smaller trade deals also often overlap and conflict and that can make trade more costly and cumbersome, as companies and governments struggle with separate rules for different countries.

Bilateral and regional agreements also have opponents in many countries, who fear a smaller nation may give away too much in the rush to get access to a bigger market. And in many countries, such as South Korea, powerful political constituencies, such as farmers, may keep government leaders from adopting significant trade liberalizations.

Gawain Kripke, a senior trade policy analyst with the aid group Oxfam International, says the failure of the Doha round means the poorest countries will lose the leverage they have in the WTO There, each country's voice is given equal weight, but in bilateral or regional trade deals, the smallest countries often are ignored.

"For them, there aren't that many options. There's the possibility of bilateral arrangements, but for the poorest countries, there's not that much interest in those markets for rich countries, and therefore, not that much demand for bilateral agreements," added Kripke.

To salvage at least part of the Doha agenda, Kripke says aid organizations like his will hold rich countries to their commitments to give greater market access for the world's poorest countries, and to build trade infrastructure in the developing world.

Mark Nguyen is an international trade lawyer specializing in Southeast Asia. He notes that elections in the next few years in the United States and other major trading powers may distract politicians from the trade talks.

"Nothing is going to happen until countries come back and agree on moving forward," said Nguyen. "If the political will hasn't been generated enough in the past five years, is it ever going to happen?"

Several trade experts say it is unlikely that there will be much movement on the Doha agenda for two or three years.

For developing nations, eager to sell their goods overseas, trade advocates say the collapse of the talks means a missed opportunity to speed economic growth. The World Bank estimated that a successful Doha deal would have boosted global trade by about $100 billion a year - most of which would have gone to developing countries.

XS
SM
MD
LG