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Wto fails to balance needs { September 28 2003 } Original Source Link: (May no longer be active)
http://www.law.northwestern.edu/depts/communicate/newspages/article_full.cfm?eventid=1009&pagetype='faculty_news'Burkina Faso and three other African countries--all among the very poorest in the world--called for the gradual elimination of Northern subsidies on cotton, one of the few products they are able to produce, as well as compensation for past market distortions. Their proposal received much favorable media coverage but was politely brushed aside with the suggestion that they should diversify into other crops.
http://www.law.northwestern.edu/depts/communicate/newspages/article_full.cfm?eventid=1009&pagetype='faculty_news'
September 28, 2003
Chicago Tribune
HALFHEARTED; ATTEMPT TO BALANCE COMPETING NEEDS FAILS
By Kenneth W. Abbott. Kenneth W. Abbott is a professor in the Northwestern University School of Law. He recently completed a study of the Doha negotiations for the Asian Development Bank
Anti-globalization activists clashed dramatically with police outside the World Trade Organization ministerial conference in Cancun this month, and one, a Korean farm leader, killed himself to protest agricultural trade policies. But the most significant action still took place inside the hall. On Sept. 14, the final day of deliberations, developing countries that included Brazil, China, Egypt and India walked away from a proposed trade deal, forcing the assembled trade ministers to adjourn empty-handed.
WTO officials and commentators have been quick to label it ironic, even tragic, that developing countries provoked the collapse of the Cancun ministerial. After all, the conference was designed to give political momentum to a set of multilateral trade negotiations known in WTO parlance as the "Doha development round."
A success at Cancun could have encouraged negotiators to restrain Northern Hemisphere agricultural support programs and export subsidies, which distort world markets and overwhelm small farmers in the developing world.
The Southern Hemisphere undoubtedly would have gained, along with the rest of the global economy. Yet the Cancun collapse should come as no surprise.
The current round of negotiations was launched in Doha, Qatar, in November 2001. Its agenda was marked by powerful rhetoric pledging special attention to the needs of poor countries. But the fine print in the document undercut many of those pledges from the outset.
The U.S., European Union and other developed countries failed to follow through on the remaining commitments--with one important exception, a last-minute agreement easing access to patented drugs, which many experts see as flawed. Five days of talks at Cancun produced more of the same.
At its heart, the deal the South left on the table would have modestly liberalized Northern agricultural support programs, export subsidies and trade barriers--mainly in line with changes already enacted by the U.S. and the EU--in return for authority to start negotiations on foreign investment and other subjects new to the WTO.
But the problem runs much deeper than those specific issues. The North must give real meaning to its "development round" rhetoric on a range of issues on the Doha agenda--from market access to food security to the rebalancing of inequitable obligations--if the negotiations are to succeed.
Pledges to poor
The WTO launched the Doha round just a year after the UN Millennium Declaration. In a solemn ceremony at the General Assembly, more than 150 heads of state, including President Bill Clinton, pledged to "spare no effort" to halve extreme poverty (less than $1 a day in income) by 2015 and make the right to development a reality around the world.
Those commitments reflect a broad consensus among development experts. The central goal of development policy is to combat poverty. Trade and market reforms are important tools for promoting economic growth. But poverty involves more than just low income. It includes inadequate economic opportunities, deprivations such as hunger and disease, and limited political power. As difficult as it seems, development policy must address all those issues.
Trade negotiations can contribute to a comprehensive development policy in many ways: by expanding access to foreign markets for developing-country exports, especially labor-intensive manufacturing and agricultural products; allowing Southern governments to temper domestic market reforms with social safety nets and targeted interventions; providing for food security, access to drugs and similar human needs; relaxing requirements for costly domestic institutions and legal procedures; and providing special exceptions from trade rules for vulnerable economies.
Looked good on surface
The agreement that launched the Doha round incorporated many of those themes; it fit comfortably with the emerging global consensus on development. It called for increasing market access for developing-country exports, eliminating all barriers to exports from the least-developed countries and reducing Northern agricultural support programs and subsidies.
It authorized negotiators to correct some 90 imbalances in existing WTO agreements and to review all special exceptions for developing countries to make them more effective. It approved discussions of food security, transfers of technology, the burdens of debt, protection of traditional knowledge and the special problems of the poorest countries, as well as access to medicines.
Yet there was always less to those initiatives than met the eye.
The Doha agenda left untouched some of the most controversial issues, such as the economic burdens created by strict intellectual-property rights, the growing use of anti-dumping procedures for protectionist ends, the exclusion of foreign service workers from labor-intensive industries such as construction and the "one size fits all" institutional requirements imposed by some WTO agreements.
It assigned many development issues, such as technology transfers, debt and traditional knowledge, to weak negotiating procedures incapable of producing firm commitments. And remarkably, it seemed to require developing countries to make new concessions in return for correcting acknowledged inequities in existing agreements.
As negotiations got under way early in 2002, the honeymoon with development policy ended abruptly. Negotiators deadlocked on all three key elements in the negotiations on agriculture: domestic support programs, export subsidies and import barriers. As a result, the South and leading agricultural exporting countries deferred serious bargaining in other important areas, including trade in manufactured goods.
By the Cancun meeting, negotiators had missed every deadline set in the Doha agenda. Even more striking, Northern negotiators seemed to balk at translating development commitments into concrete agreements. Sharp North-South divisions led to stalemates on correcting imbalances, strengthening special exceptions and similar issues.
Muted expectations
As ministers gathered in Cancun, few believed they could achieve a major breakthrough.
Agriculture and Northern proposals for negotiations on investment and other new issues became the major points of contention, but disappointments on the whole range of development issues colored Southern attitudes.
New disappointments also arose.
Burkina Faso and three other African countries--all among the very poorest in the world--called for the gradual elimination of Northern subsidies on cotton, one of the few products they are able to produce, as well as compensation for past market distortions. Their proposal received much favorable media coverage but was politely brushed aside with the suggestion that they should diversify into other crops. Negotiators actually made progress on several significant issues at Cancun, but in the end the gulfs were too wide to be papered over.
Although the original deadline of January 2005 is now out of reach, the Doha negotiations have not been abandoned, and they still can be saved.
If they are to succeed, however, governments must give concrete effect to the promises made in the Millennium Declaration and the Doha development agenda, not only on agriculture but throughout the complex rules of the WTO. The South has a strong moral case, based on the repeated commitments of world leaders and the broad consensus among development experts.
It has powerful bargaining chips in the desire of the North for negotiations on investment and other new issues and in the potential for expanded access to its own increasingly attractive markets. It has a strong new leader in China, which only joined the WTO in December 2001. Mere rhetoric no longer will suffice.
Role reversal
WORLD ECONOMY
Developments at Cancun point to strong pressure for changes in the established order. And beyond the World Trade Organization, technology promises radical changes in the way people work across the world, eventually at the expense of the service economy in the United States.
Last Modified: June 12, 2003
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