A new report by the aid group OXFAM calls the Doha Round of trade talks a "Recipe for Disaster." The report says the chances of a trade deal that helps reduce poverty being done this year are looking increasingly slim.
The OXFAM report says the development agenda of the Doha trade round is dying a death by one thousand cuts. It says the Director-General of the World Trade Organization, Pascal Lamy and other key actors in the negotiations have deliberately lowered expectations.
Executive Director of OXFAM, Jeremy Hobbs, says the proposals on the table fall far short of what developing countries think they were promised and could realistically expect. Nevertheless, he says OXFAM does not want to see Doha collapse.
"We certainly do not advocate taking a walk," Hobbs says. "But, what we think is more feasible is that developing countries should hold out for a better deal which means the prolongation of the process. And, we are saying that that is far from ideal. There is a lot of risks in what is called a postponed or slow round and certainly is not what we have been advocating until now. But, if what is on the table does not improve, unless we get better offers than we think that would be a better option than signing something that could actually be so damaging."
One of the risks in prolonging the Round, Hobbs says, is that it might be harder to get a deal through the United States Congress after the U.S. Trade Promotion Authority expires in mid-2007.
At the Hong Kong ministerial in December, WTO members agreed to put all new proposals on the table by April 30. Meetings this week in Geneva failed to nail down agreements. The members have acknowledged they would miss that deadline and have canceled a planned ministerial. A new deadline has been set for July.
Oxfam blames, what it calls, brinkmanship by the European Union and United States for failure to move the talks along. It accuses the two powerful trading blocks of sidelining development concerns.
OXFAM says agriculture is the key to unlocking poverty. Yet, it says offers made so far are not good enough. Indeed, it adds current proposals would allow both the European Union and United States to actually increase their trade-distorting spending on agriculture.
The Head of OXFAM's Trade Team, Samar Verma says poor countries are getting a raw deal on NAMA or Non-Agricultural Market Access. He says current proposals on the WTO table would eliminate their ability to raise or lower tariffs on industrial goods.
"The power of countries to be able to change tariffs, move it up or down at the time that they are needed without any restrictions from any multi-lateral agreement has been a very significant factor, a very significant tool of economic development for even the contemporary developed countries like the United States," Verma says. "This option of using tariff as an instrument of development will be significantly curtailed, if not eliminated by what is being discussed at the moment in NAMA negotiations."
Verma warns poor countries will not be able to increase tariffs to protect their domestic sector from increased imports, including the dumping of subsidized agricultural products from rich countries. He says this is likely to have a very big impact in terms of job losses and peoples' livelihoods.