[WTO Doha Round] Bold global trade action needed to cut world poverty: Annan

from Ireland On Line

Secretary-General Kofi Annan has urged wealthy nations to take bold action this year to liberalise global trade and help developing countries escape poverty, calling the lack of progress “perilous”.

Annan’s appeal for a successful conclusion to negotiations on lowering trade barriers was backed by top officials from the World Trade Organisation, the International Monetary Fund and the World Bank at a meeting focusing on efforts to meet UN goals to cut extreme poverty in half by 2015.

Alongside progress on debt relief and boosting aid to poor nations, Annan said yesterday that “the lack of significant progress on trade is conspicuous, and even perilous”.

He told international finance and trade officials who came to the UN following their spring meeting in Washington over the weekend that completing the so-called Doha Round of trade talks is essential to enable millions of poor and marginalised people to lift themselves out of poverty.

The World Trade Organisation, which sets the rules for global commerce, launched the talks in 2001 in the Qatari capital, Doha, with the aim of slashing subsidies, tariffs and other barriers to global commerce, and using trade to help poor nations.

Negotiators have been at an impasse for months, with developing countries demanding that rich nations do more to open up their farm markets.

The European Union and United States, in turn, want major developing countries like Brazil and India to liberalise their industrial and services sectors. Sniping between the EU and US has further stalled progress.

“In the last 12 months, the international community has taken major steps toward debt relief and increasing aid,” said WTO Deputy Director-General Valentine Rugwabiza, “but there is a missing piece of the development puzzle - an essential third pillar – and that is trade opening.”

She warned that if negotiations aren’t successfully concluded this year, the chances of a global trade deal on the scale envisioned by Doha “will be impossible in the foreseeable future” and “developing countries will lose a once-in-a-generation opportunity to open world markets for their exports and redress imbalances in global trade relations.”

Annan expressed fear that the difficulties in negotiations will lead some participants to consider settling “for something less than a true development round” that helps the world’s poor.

“That must not be allowed to happen,” he said. “We must maintain our ambition, sustain the drive, and demonstrate the political courage needed to conclude the talks by the end of the year.”

IMF Deputy Managing Director Agustin Carstens said the strong broad-based expansion of the global economy is likely to continue but he warned against complacency because of the risks posed by high and volatile oil prices, ”a broad tightening of global financial conditions, a rise in protectionism and the possible avian flu pandemic”.

In addition, he said, “a substantive outcome to the Doha round by the end of 2006 is crucial for growth and poverty reduction”.

To sustain growth, Carstens also said the US should increase national savings, European countries using the euro currency should boost domestic demand, Japan should institute further structural reforms, and Asian countries with large surpluses should allow greater exchange rate flexibility.

Colombia’s Finance Minister Alberto Carrasquilla, who chairs the joint World Bank-IMF policy-making Development Committee, said “developing country growth is at historically high levels”.

“It is striking that all developing regions have grown more rapidly than high-income countries over the last several years,” including sub-Saharan Africa which is growing at its fastest pace in the last 30 years, he said.

Carrasquilla urged all WTO members to step up efforts to conclude the Doha round, calling it “a critical complement to other efforts to increase growth and reduce global poverty”.

Providing affordable energy for developing countries is also essential, he said, noting that two-thirds of the increase in energy demand over the next 25 years will come from developing countries “where 1.6 billion people, mostly living in Africa and South Asia, still have no access to electricity.”

This will require investments of around $300bn (€242bn) a year, Carrasquilla said.