WTO free trade negotiations threaten to collapse

The Doha round of free trade talks are at a grave threat of collapse after 10 years of negotiations. The talks conducted by the World Trade Organization had a goal of opening up rich nation markets to the poor nations. The differences between the rich and poor in making that happen seem to great to overcome. TheWTO will make one more attempt this week before signaling the end of talks.

From the Guardian, writers Larry Elliott and Heather Stewart give us the details.

After months of stalemate, the World Trade Organisation has set a deadline of Friday for the leading players to cut a deal in the key area of industrial tariffs. Pascal Lamy, the WTO's director general, described the situation as "grave" after seeing no signs of a breakthrough since the start of 2011.

He had said it was crucial for progress to be made by Easter if there was to be any chance of completing the round by the end of this year. In a clear warning about the state of the talks, Lamy said negotiators should "think hard about the consequences of throwing away 10 years of solid multilateral work".

"This is the diplomats in Geneva raising the white flag," said Jeffrey Schott, a fellow of the Peterson Institute thinktank and a former US trade negotiator. At the G20 summit in Seoul last year, world leaders committed themselves to completing the long-running talks, but Schott said "the G20 leaders have dropped the ball on this".

With little evidence that the leading developing nations – China, India and Brazil – are prepared to bow to US and European Union pressure to make deeper cuts in the protection offered to their manufacturers, the mood at the WTO's Geneva HQ was sombre this weekend. Lamy is expected hold a series of informal "green room" discussions on Thursday before calling trade negotiators together on Friday, but few in Geneva are expecting a breakthrough.

Europe's trade commissioner, Karel de Gucht, said "there is no reason to be optimistic at this moment in time" and that it was time to start thinking about a "plan B" should the talks collapse.

Is the Doha round delivering on poverty?

From IRIN, a story that examines if the Doha round of free trade talks is accomplishing anything to ease poverty.

Skepticism marked discussions at a just-ended global poverty summit in Johannesburg on whether the Doha Development Round of negotiations at the World Trade Organization could help reduce the number of poor people in developing countries.

The Doha talks, which began in 2001, are aimed at reducing barriers to market access throughout the world, with the development of poor countries at the heart of their agenda. They look at three main sectors - agriculture, intellectual property and services.

Jomo Kwame Sundaram, the assistant secretary-general of the UN Department of Economic and Social Affairs and a leading Malaysian economist, said it had been extremely difficult to measure any socio-economic benefits of such access.

He said studies in his country had shown that a paddy farmer’s child had better nutrition than the children of a rubber farmer who now had access to global markets.

Improving income levels did not automatically imply better lives for the poor in any country, as other factors such as the implementation of policies that benefit the poor within countries matter a lot more, said Joseph Stiglitz, Nobel prize-winning economist and chair of the Brooks World Poverty Institute, the organizers of the Johannesburg summit.

He cited the USA as an example of where gross domestic product had grown substantially but not filtered down to the poor, who were worse off than a decade ago. "It [high economic growth levels] had a trickle-up effect," said Stiglitz.

Subsidies

Over the past decade the Doha talks have failed to get developed countries to stop subsidizing their farmers and agricultural exports, something that directly threatens livelihoods and food security in the developing countries.

While some European Union (EU) countries have abolished or reduced agricultural subsidies, the USA has not. It reintroduced subsidies for cotton farmers in 2008, pointed out Bernard Hoekman, an international trade expert at the World Bank, severely affecting cotton farmers in West African countries like Benin, Mali, Chad and Burkina Faso.

The Johannesburg summit called for the rapid elimination of export subsidies, especially for cotton, sugar, groundnuts, dairy products and fish.

Sundaram said sub-Saharan Africa did not stand to benefit from the Doha talks. He pointed out that many least developed countries (LDCs), most of them in Africa, lacked the capacity to compete in the global market.

Experts at the Johannesburg summit said Bangladesh and Cambodia were among the few LDCs to build a competitive edge - in their textile and clothing sectors.

LDCs are seeking duty and quota-free (DFQF) access to markets in developed countries at the Doha talks. “In practice, many advanced and emerging market economies have agreed to allow DFQF market access for LDC products under at least 97 percent of tariff lines. While the difference between 97 percent and 100 percent may seem insignificant, many LDCs export so few product categories that even a small number of exclusions can sharply limit the benefits of trade preference programs,” says the International Monetary Fund.

The Johannesburg summit called for the setting up of an annual reporting mechanism on DFQF.

Fishing

The Doha talks are also discussing EU fishing industry subsidies which encourage European fishing beyond Europe - something that adversely affects the millions of African fishermen, said the World Bank's Hoekman. "If those subsidies are removed it will prevent overfishing, benefiting the poor fishing communities along the African coast and the environment."

The Johannesburg summit also called for improvements in the General Agreement on Trade in Services (GATS) to ease restrictions on labour mobility from LDCs in order to boost such sectors as health, education and call centres.

Not all doom

The Doha talks have made progress in some areas, for instance Trade-Related Aspects of Intellectual Property Rights (TRIPS), which provides minimum standards for intellectual property protection in sectors such as music and medicine, and led to the introduction of greater flexibility in the manufacture of drugs for public health services.

Also under Doha, the EU was forced to abolish preferential access to banana exporters in African, Caribbean and Pacific (ACP) countries - benefiting LDCs which have preferential access under the EU's Everything But Arms regulation, said Hoekman.

The Johannesburg summit warned, however, that “the length of time that the [Doha] negotiations have taken threatens to render aspects of the agenda obsolete."

But now is the time to push for a conclusion on outstanding issues, said Hoekman, as the US Farm Bill, which covers agriculture subsidies and food aid, comes up for review in 2012.

Report calls for end of US and European cotton subsidies

The FairTrade Federation issued a new report that calls for the removal of subsides that the US and European governments pay to their cotton farmers. FairTrade says that cotton farmers in West Africa could earn ten percent more if subsidies in the US were removed. The report says that 1 billion dollars in subsidies are payed out every year.

From the BBC, writer Mark Doyle details the report for us. The entire study can be viewed at this link.

Trade negotiators for the so-called "Cotton 4" West African states - Chad, Mali, Benin and Burkina Faso - believe that removing US cotton subsidies alone could boost West African cotton farmers' income by up to 10%.

A report published by the Fairtrade group - which pays premium prices for organically-produced agricultural goods to stabilise incomes in poor countries - says an increase of this magnitude can make a huge difference.

Working with co-operatives in Mali, Fairtrade says the extra money generated by the premium prices it pays has boosted school enrolment for farmers' children and allowed them to build a basic health clinic.

In parts of southern Mali, the report says, the extra money generated by organic cotton farming has boosted school enrolment to 95%, compared with a national average of 43%.
...

Cotton producers in the United States, represented by the National Cotton Council, counter that subsidies have helped them to establish a stable income for more than 340,000 people employed in some of the poorer southern states of the country.

They add that many more jobs have been created in ancillary industries, such as those producing crop-protection chemicals and machinery.

European Commission officials make similar points - saying the subsidies help farmers in Greece and Spain, some of who are relatively poor by European standards.
...

In 2001, a new series of multilateral trade negotiations began, known as the Doha Round.

One of the aims of the Doha round was to set new global trading rules which would stimulate growth and wealth in underdeveloped countries. One way of doing this would be to reduce tariffs and subsidies, so creating a "level playing field".

Some good news from WTO meet in Geneva

This week's meeting of the World Trade Organization has concluded. While the trade ministers did not talk about a world trade pact, there were some regional agreements made.

A group of developing nations has agreed to cut tariffs on a whole host of goods. Also Brazil promised to open up their markets, and there was an agreement to end the "banana wars" between the US and the EU.

However, there was no movement on the Doha round of talks for a world wide trade deal. For a good explanation on why the US is stopping any concessions on a deal, do to this story from IPS and reporter Sanjay Suri.

Our snippet from this Reuters article concentrates on the South-South deal. Writers Jonathan Lynn and Jason Rhodes give us more details.

Jorge Taiana, foreign minister of Argentina, said the South-South pact showed developing countries were keen to clinch deals to expand trade.

"This is a clear demonstration that the developing countries are willing to continue working on strengthening South-South trade and in a process of liberalisation compatible with development," Taiana told a news conference.

The South-South deal includes trade heavyweights Brazil, India, Argentina and South Korea but not China.

It would reduce by one-fifth the actual tariffs countries apply to 70 percent of each other's industrial goods rather than the maximum ceilings negotiated at the WTO. The precise details would be worked out by the end of September 2010.
...

The absence of a major item on the WTO ministerial agenda gave trade officials from developing countries, who rarely meet in person, the chance to hold a series of face-to-face meetings and seek to forge new regional alliances.

Ministers from India, the Mercosur group of Argentina, Brazil, Paraguay and Uruguay, and the SACU customs union of South Africa and its neighbours launched a study on a possible regional trade agreement between their countries.

The authors of this article also received quotes from the US representative who talked about completing Doha, but we can all see through that, and didn't include it in our snippet.

Calling the WTO to action, again

Before the World Trade Organization meetings began, a coalition of 100 developing nations called on the powers that be to agree to a new world trade pact. The coalition wants the WTO negotiators to pass a world trade deal by 2010, but previous deadlines have come and gone without any action.

From this AFP article that is hosted at Google News, we found out more about the coalition's statement, and who they believe is standing in the way.

Launched in the Qatari capital in 2001, the Doha Round aims at lifting developing countries out of poverty by striking an accord that will cut agriculture subsidies and tariffs on industrial goods.

However, negotiations have been dogged by disagreements on how much major trading blocs such as the United States and the European Union should reduce aid to their farmers and the extent to which developing countries such as India, China and South Africa should lower tariffs on industrial products.

"There is urgent need to translate political statements into concrete engagements in Geneva in order to accomplish the shared objective of concluding the Round in 2010," said the statement issued after a meeting between G20 ministers.

Without naming names, Brazil's Foreign Minister Celso Amorim pointed in particular to "one country which is stopping us from moving forward."

However, another Latin American diplomat was more explicit, saying: "We clearly lack an explicit position from one of the most important members of the negotiations. We are of course talking about the United States."

He added that the WTO ministerial meeting "should pressure" Barack Obama's administration to take a deeper engagement on trade talks.

What will it take to reach a global trade deal by 2010?

The latest deadline for the Doha round of world trade talks is set at 2010. The problem is, many deadlines in this round of talks have come and gone.

The head of the World Trade Organization tried to put some heat on world leaders to start talking and making concessions in remarks made today. However, hopes are dim unless world leaders especially those in Washington are serious in compromising.

From Reuters, writer Jonathan Lynn gives us this round up of opinions.

WTO Director-General Pascal Lamy said countries were making some progress in the latest intensive negotiations in Geneva in areas such as facilitating trade and the technical work necessary to implement an eventual deal in agriculture.

"But I also believe it will be difficult to get to 2010 without a serious acceleration of the pace," Lamy said.

"We need to see real negotiations emerge, not only informal consultations and discussions, but real exchanges among members," the Frenchman told the WTO's General Council.

Leaders of the G20 rich and emerging countries called at their summit in Pittsburgh last month for the Doha round, now in its eighth year, to be completed in 2010.

That was the latest in a series of calls to finish the longest running trade round, launched in late 2001 to open markets and help developing countries prosper through trade.

But the high-level political exhortations have not been matched by compromise and movement in the Geneva talks, leading many to question whether the leaders are sincere in their call for real negotiations.

"Technically the work is almost done. What we are missing now is political will," said Egypt's trade minister, Rachid Mohamed Rachid.

Rachid, echoing a view held by many emerging nations and rich countries alike, said the problem was that Washington -- the key to any deal -- was not engaging fully in the talks.

"The United States has not made their position clear yet vis-a-vis trade," he told a meeting of the Arab-Swiss Chamber of Commerce in response to a question from Reuters.

"Imperative" to complete Doha round of free trade talks

The chief trade talker for the U.S. is saying all the right things on the eve of new global trade talks. U.S. Trade Representative Ron Kirk says it's "imperative" to reach a global trade deal in light of the economic recession.

From this story in the Mail and Guardian, we see this update of the preliminary talks being held in New Delhi.

President Barack Obama's top trade envoy said the US believed bilateral and multilateral discussions were needed for agreement in the eight-year-old World Trade Organisation (WTO) Doha round, which has been dogged by failure.

He declined to reaffirm 2010 as the deadline for concluding the trade deal, saying that "substance will drive this process, not setting a deadline and timeline".

"The toughest part of a marathon is the last two miles, there is a lot of hard work to be done," he said.

Wealthy nations, including the US, and emerging nations agreed at a summit in July to try to conclude the Doha Development Round in 2010.

Ministers agreed on Friday to resume high-level talks in Geneva on September 14 in a move hailed as a "breakthrough" by Indian Trade Minister Anand Sharma.

Kirk praised India for taking the initiative to host the meeting, which was aimed at setting out a roadmap for concluding the Doha round that seeks to lift hundreds of millions of people out of poverty and boost world commerce.

Not much talking being done now at the WTO

Ambassadors at the World Trade Organization says there is not a lot of negotiations going on. That is despite a G-8 pledge to complete a global trade pact by the end of next year. Not much will be done for the rest of the summer, because many WTO diplomats go on vacation in August.

From this Associated Press story that we found at the Gloucester Daily Times, we read more about the slow WTO.

"Mismatch" was the word used by ambassadors Friday at the 153-member World Trade Organization in comparing that promise to reality on the ground.

They said the current talks were falling far short of the pace and intensity needed to wrap up a deal once promised as a recipe for lifting millions of people out of poverty and adding billions of dollars to the global economy.

There is a "marked and embarrassing gap" between what world leaders and top trade ministers have called for and what is being accomplished in talks, Australia's ambassador Peter Grey told a meeting of the WTO membership.

Washington's outgoing envoy Peter Allgeier said there was "no doubt" that the slow progress of technical work was failing to match the ambition of politicians, while his Indian counterpart Ujal Singh Bhatia claimed there was a "striking lack of energy" in WTO negotiations.

Bhatia said the disconnect threatens to damage the credibility of the WTO and world leaders, who have voiced their support for the Doha round at recent summits in Bali, Indonesia; Paris; L'Aquila, Italy; and Singapore.

The global trade talks were supposed to be completed in 2004 and have been at a standstill for months.

The G-8 talks about aid

In the G-8 meeting in Italy the world's eight biggest economies opened the table to other emerging economies. The invites are seen by many as admission that the eight countries alone cannot solve all the worlds problems.

Brazil, China, India, Mexico and South Africa pressed the G-8 on reopening the Doha round of global trade talks. The hope is that a free trade agreement that removes barriers would open more markets to the goods of the under-developed world.

For the focus of our snippet, this Associated Press article tells us what the G-8 said about aid to the underdeveloped world. Writer Colleen Barry made the trip to Italy.

On the issue of aid, Italian Premier Silvio Berlusconi said Wednesday that the leaders have decided they need to change the way they help Africa, and introduce a mechanism of accountability to review efforts.

"We want our funds to go to precise investments, schools, buildings and so on," Berlusconi told reporters.

On the issue of aid, Berlusconi has said the G-8 was looking into establishing an agricultural development fund for Africa, to shift away from giving handouts to the poor to helping them grow their own food.

Italy has been under intense criticism going into the G-8 summit for having maintained only 3 percent of its aid pledges of $3.5 billion to Africa made at a 2005 G-8 summit in Gleneagles, Scotland. The G-8 at that time promised to increase aid to sub-Saharan Africa by US$25 billion a year by 2010.

Berlusconi has acknowledged Italy's failure to respect its Glenagles aid pledges, but has said it only was a delay and that he had no other choice but to cut aid because of Italy's mounting debts and the global financial crisis.

"I'm sorry we didn't keep our promises," he said in an interview over the weekend with Bob Geldof, musician and head of the anti-poverty group ONE, which has shamed Italy for its poor performance.

WTO still hopes for more trade talks

The leader of the World Trade Organization recently shared what he hopes to see in the new year. The WTO Director Pascal Lamy said he wants to renew the Doha round of free trade talks. Lamy says the economic slowdown has really hurt trade between nations, and that increased trade could help developing countries.

From the Hindustan Times, this Reuters article recorded Lamy's remarks that he made while in the UK.

The Doha round was launched in late 2001 to boost world trade and help developing countries export their way out of poverty, but agreement has proved elusive.

The G20 group of rich and emerging nations called in November for an outline deal by the end of 2008 to help counter the economic crisis.

But last month Lamy decided political differences were still to wide to invite ministers to Geneva to seek a breakthrough.

In his speech on Thursday he praised Britain's support for the negotiations and Prime Minister Gordon Brown's leadership.

"It is this leadership that we are counting on to ensure that the coming G20 summit in April here in London will result in a recommitment to conclude the negotiations this year," said Lamy, who also met Brown on Thursday.

Lamy said the crisis made it more urgent to reform the global trading system to help developing countries.

"There is no doubt that this crisis will have profound and possibly prolonged effects on developing countries, the least developed among them in particular, whose recent good economic performance has been largely driven by external factors," he said.

Analysis of the EU preparations for the next Doha meeting

The next big international meeting on development and trade is coming up in December in Doha, Qatar.

The meetings sponsored by the United Nations hope to develop finance for the world's poor. But the recession felt thought the world may carry the agenda instead.

A great article today in IPS talks about the preparations that EU member states have put into the upcoming meetings. Writer David Cronin gathers the opinions of aid groups and NGO's on what the European Union is doing.

For past meetings similar to this, the EU was widely praised for their leadership, but now they are being criticized.

Last week Jeffery Sachs gave what he would like to see on the meetings agenda.

Today, we wanted to highlight the subject of tax havens from the IPS article.

One of the most contentious issues on the Doha agenda concerns how taxation regimes in Europe are depriving poor countries of sorely needed resources.

A new report by the Centre for Research on Multinational Corporations (known by its Dutch acronym SOMO) in Amsterdam notes that revenue generated from tax accounted for just 13 percent of national income in countries classified as low-income in 2000. By contrast, the average level for industrialised countries belonging to the 30-member Organisation for Economic Cooperation and Development (OECD) was 36 percent.

Estimates for the amount of money that poor countries lose as a result of capital flight -- the expatriation of taxable revenue -- vary from 350 billion dollars to 500 billion dollars per year, several times more than what those countries receive in development aid. A large amount of this 'hot money', as it is sometimes called, ends up in tax havens either on EU territory or on territories answerable to its member states. Such havens include the City of London, the Cayman Islands, the Channel Islands, Cyprus and Luxembourg.

To remedy this situation, anti-poverty campaigners are demanding a crackdown against these tax havens, as well as the establishment of robust international accountancy standards that require major firms to report precisely how much they earn in every country where they operate, and what they do with the sums involved.

These calls are being resisted by treasury officials in Britain, who are eager not to subject the City of London to rigorous controls.

"Closing down tax havens is a European responsibility," said Molina. "Many of the tax havens are in European jurisdictions."

Jeffery Sachs on the reforming of the financial system

Jeffery Sachs says that the credit crisis is a clear indication that the international financial system is broken. But he also says it's broken in other ways. Such as a billion people being cut of from the system because of where they live, and no energy supply plan to address demand and climate change.

The next big international meeting is in December. In his latest commentary, Jeffery Sachs proposes an agenda for the meeting, as found in the Guardian.

Here, then, is an agenda for Bretton Woods II. First, we need to restructure global finance, based on an expanded system of capital adequacy standards, financial reporting, system-wide risk management, and new lender-of-last-resort capacities. Derivatives traders, hedge funds, and broker dealers would be brought under regulatory control. The IMF would be empowered to be a true global lender of last resort (as I urged a dozen years ago, warning of the threat of self-fulfilling panics). To make this possible, a small tax on financial transactions - a Tobin tax - would be implemented to expand the IMF's war chest in case of crisis and to fund other urgent international needs.

Second, the new global financial structure should help to rescue the world from human-induced climate change. A straightforward tax on the carbon content of fossil fuels, levied by all countries, would do the job, and much better than the enormously cumbersome emission-trading system concocted and championed by the same financial engineers who brought us our current banking crisis. Most of the carbon-tax revenues would stay at home in each country, to help finance low-emission technologies. Some would be directed to finance three global public goods: research and development on sustainable energy; transfer of sustainable-energy technology to low-income countries; and climate-change adaptation.

Third, the World Bank should be refocused with clear goals, and accountability for their success. Specifically, the bank should have one overarching assignment: helping the poorest countries achieve the millennium development goals to reduce poverty, hunger and disease. The bank is poorly organised for such leadership today. Like any bureaucracy, it avoids being held accountable for measurable results. With a tighter focus on the MDGs, the bank should also be supported with much larger financial resources from new revenue sources (such as the Tobin tax), so that the bank can better help the poorest countries expand vital infrastructure (power, roads, water, sanitation and broadband networks).

Fourth, the global trade agenda should be integrated with the finance, and environment objectives. The Doha trade round has failed because the world could not see any urgent reasons for its success. A trade agreement worthy of the effort would do two main things. Importantly, it would help the poorest countries to be more productive so that they can be full participants in the global trading system. "Aid for trade" would help these countries to build the skills, roads, bridges and clean power grids to support increased trade. In addition, global trade would promote environmental sustainability, to help enforce compliance with reduced carbon emissions and protection of endangered biodiversity.

All these reforms are vital for long-term sustainable growth and development. If the political leaders focus only on financial-sector stability, but neglect the long-term problems of energy supplies, climate change, food production, disease control and extreme poverty, then global growth might be restored in the short term, only to succumb quickly to another global bout of rising energy and food prices, and geopolitical instability.

WTO Doha talks don’t spell disaster for Africa

from New Vision

By Alec Van Gelder

The recent failure of the World Trade Organisation’s Doha Round and the long-standing failure of aid need not need spell disaster for African economies. The tools for promoting growth and prosperity are in their own backyard and three of the world’s top 10 pro-growth reformers are in Africa, according to the World Bank report Doing Business 2009, released recently.

Useful reforms in Africa have increased by over 150 per cent over the past five years, helping to maintain the record six per cent a year growth of the past decade. Some countries are buoyed by high commodity prices but African economies are diversifying and expanding.

The top reformers in the whole continent, Botswana, Burkina Faso and Senegal, have focused specifically on an area of upmost importance, simplifying the procedures for trading with the rest of the world.

Redtape, logistics bottlenecks and customs corruption are trade barriers just like tariffs. “Reforms are already paying dividends for countries rich and poor but there is scope for greater improvement still,” trade analyst Daniel Ikenson of the Cato Institute says.

According to Doing Business 2009, it takes an average of 39 days before exports are allowed to leave Uganda: nine days to prepare documents, six days to clear customs and an additional six days for loading. The entire process costs exporters a tidy US$3,090—nine times the average annual Ugandan income. And most of this rigmarole applies to imports too.

In Angola it takes 68 days: the economy is booming now thanks to high prices for oil and diamonds, with annual growth over 15 per cent, but removing these trade barriers would give Angolans a better chance to prosper when those prices take a tumble.

The United Nations Conference on Trade and Development estimates that just a one per cent reduction in the cost of maritime and air transport in developing countries—easily achievable in Angola—could increase global GDP by US$7 billion.

Across Africa, a 10 per cent increase in exports to rich countries could be achieved simply by cutting export time by about four days—the regional average is a suffocating 34.7 days. Dropping these barriers would also boost the paltry level of regional trade: under 15 per cent of African trade occurs between neighbours.

So the fact that Africa’s top reformers have prioritised trade facilitation is very good news. Crucially, their reforms illustrate how any economy can move in the right direction unilaterally, without waiting for bureaucrats to agree on complicated agreements at the WTO or elsewhere.

Optimistic estimates predicted that agreement at the WTO Doha Development Round would have injected an additional US$287 billion into the global economy, half of which would have benefitted poor countries.

The proposed cuts in tariffs and subsidies would have been wonderful but the agreement was politically unachieveable.

Yet the right unilateral reforms within Africa could be even more beneficial: a recent World Bank study of 75 countries found that if below-average performers on trade obstacles, many of them in sub-Saharan Africa, could raise their scores only halfway to the average score, world trade would increase by $377b, or about nine per cent a year.

Link to full article. May expire in future.

Trade not aid the answer to poverty: economists

from Reuters Africa

More trade talks are coming this week in Ghana. The trickiest part is "food aid" allowing countries to sell surplus food to countries with out the export subsidy. - Kale

By Jonathan Lynn

GENEVA - As ministers from over 100 countries gather in Ghana to review how effective aid is in helping developing nations deal with poverty, many economists argue the answer is elsewhere -- in freeing up trade.

The meeting in Accra this week comes just over a month after talks at the World Trade Organisation (WTO) to secure a breakthrough in the long-running Doha round collapsed at the end of July.

Rich and poor countries alike have called for efforts to save the Doha round and build on the compromises that were reached in July's talks. Senior negotiators are likely to meet in September to see whether the talks can be revived.

Economists of all persuasions agree now that growth is the key to lifting people out of poverty -- a view reinforced by a major World Bank report in May on growth and development.

And the key to growth is trade, the WTO says. "Trade openness is believed to have been central to the remarkable growth of developed countries since the mid-20th century and an important factor behind the poverty alleviation experienced in most of the developing world since the early 1990s," it said in a report last month (July).

Former New Zealand Prime Minister Mike Moore, who headed the WTO when the Doha round was launched, put the case for trade in a characteristically forceful manner earlier this month. "Seven years ago, we introduced at Doha what was to be a "development round". All trade rounds are," he said. "President Kennedy, who introduced the Tokyo round, famously said: 'This will lift all boats and help developing countries like Japan.' Case made, I would have thought."

Since Japan's rise to prosperity, many other countries, such as South Korea, Chile and India, have followed a similar path.

Many developing-country leaders share the view that the solution to poverty lies in the increased economic capacity that trade can bring rather than in aid handouts. "Africa critically needs to realise development and get itself out of poverty through the establishment of fair trade rather than aid," Kenya's Trade Minister Uhuru Kenyatta, who coordinates African countries at the WTO, said after the collapse of the WTO talks.

DEVELOPMENT THE GOAL

The Doha round, launched in Qatar capital in late 2001, was expressly intended to help developing countries export their way out of poverty, by tackling the unfinished business of previous trade rounds such as the distorted global food trading system.

Many advocacy groups argue that trade negotiations are still skewed against the interests of poor countries.

Forcing them to open up their markets to provide more export opportunities to Western businesses could threaten the livelihoods of millions of subsistence farmers and snuff out infant industries.

The Manila-based Focus on the Global South said the collapse of the Doha talks was a welcome respite for poor countries. "The aggressive push by the rich countries led by the U.S. and the EU for more trade liberalisation at a time of global crises of food and fuel (became) too blatant for developing countries to stomach," it said.

But many changes sought by developing countries -- such as cuts in the multi-billion-dollar U.S. and EU farm subsidies -- have been on hold since the Doha talks collapsed.

Developing countries also recognise that they benefit from the rules-based multilateral trading system the WTO represents, not least because of the power it gives small and weak members.

African countries would much rather tackle U.S. cotton subsidies that squeeze them out of the market in a comprehensive WTO trade round rather than sit round the negotiating table with just with the United States.

For developing countries, many of which are in unstable areas, the security aspects of trade are also important.

The prosperity and contacts promoted by trade foster peace, and when trade rules affect major economic sectors, such as West African banana growers, they must be negotiated carefully. "If goods cannot cross borders, armies will," said U.S. Franklin Roosevelt's World War Two Secretary of State Cordell Hull who won the Nobel Peace Prize for his contribution towards the creation of the United Nations.

Link to full article. May expire in future.

Bread for the World supports India in trade talks

from New Delhi News

This is the first that I have heard from a third party on the failed Doha free trade talks. The NGO Bread for the World sides with India. - Kale

'We need a global economy that works for everyone, rich and poor alike, and not just for a wealthy few,' David Beckmann, president of Bread for the World, a Christian organisation that strives to end hunger worldwide, said in a statement in Washington Monday.

Beckmann warned that the recent collapse of the Doha Round of talks in Geneva would adversely affect the world's hungry and poor people in more ways than the negotiators realise.

'The trading nations of the world put protectionism ahead of hungry and poor people, and it worsened their plight,' said Beckmann.

'That is the real tragedy of the collapse of the Doha Round during this global hunger crisis.'

The Doha Round talks reached an impasse after the US disagreed with the stance of India and China that developing countries can impose emergency tariffs on products like sugar, cotton and rice in case of a sudden rise in imports.

The US wanted to allow emergency tariffs when a country's imports rapidly increase by 40 percent, while China and India insisted that this threshold should be 10 percent. They offefred to settle for 15 percent.

'This latest Doha Round was a golden opportunity to reduce trade-distorting farm subsidies in wealthy nations, especially in light of soaring crop prices and record prosperity among European and American farmers,' Beckmann said.

The UN Food and Agriculture Organisation estimates that 862 million people across the world go to bed hungry.

Link to full article. May expire in future.

After Doha, What’s Next?

the Center for Global Development

This is an interview with Randall Soderquist of the Center for Global Development. It explores where global trade talks can go fom here. - Kale

The collapse of the Doha Round of multilateral trade negotiations last week was a major setback for developing countries and rich countries alike. Policymakers are now trying to make sense of what went wrong and salvage what goodwill remains. Randall Soderquist, CGD’s new senior program associate for trade, says that developing countries stand to lose the most from last week’s events, as the fragmented regional and bilateral trade agreements that will likely succeed Doha will undermine their bargaining power. In a new Q&A, he explains Doha’s impact on poor countries, discusses shifting political attitudes toward trade, and offers recommendations on steps toward a new trade agenda.

Randall previously served as director for the Economic Policy Program and the Trade and Poverty Forum at the German Marshall Fund of the United States. His work there and his eight years working on trade issues on Capitol Hill bring a wealth of policy experience to CGD’s ongoing investigation of how rich-country trade policies can be improved to make it less difficult for poor people in the developing world to escape from poverty. Welcome Randall!

Q: Is the Doha Round really “dead”? Has a global agreement just been put on hold?

A: Some argue that it’s still possible to salvage the Doha Round, noting that the Uruguay Round that preceded it was put on hold for two years before it was completed and eventually signed in Marrakesh in 1994. But lots has changed since then. Before, developing countries sat on the margins, accepting the agenda offered by the so-called Quad (EU, U.S., Japan and Canada). Emerging economies like Brazil, China, and India had none of the influence they wield today. This shift in the WTO power structure and the emergence of what is in effect a multi-polar trading system make it really hard to reach a consensus. Then, too, the issues are more expansive and complex, but the WTO continued to approach this as a single undertaking—where nothing is agreed until everything is agreed. Finally, there is the changing political context in the rich countries: with growing anti-trade sentiment few politicians are willing to make trade a priority. With the upcoming elections in the United States and India and the appointment of a new Commission in the EU, there is simply not a whole lot of room to maneuver.

Q: So what happens next?

A: I suspect we will see some posturing by the key players about the need to lock in portions of the Doha Round agreement so that the talks can be revived later. Personally I think that’s unlikely. Instead I expect that the Doha Round will simply fade away as countries pursue specific sectoral and regional trade agreements that serve their individual economic interests.

Q: So, is the idea of trade for development also off the table?

A: Certainly not. There seems to be an understanding in the international trade community—public, private, and non-profit sectors alike—that poverty alleviation and economic opportunity need immediate attention. U.S. Trade Representative Susan Schwab, for example, stated that some components of the package might be moved forward on a multilateral basis. She cited duty-free quota-free access on most products for the poorest countries, trade facilitation, and environmental goods and services. So development is clearly on her radar screen. The idea has been floated among her counterparts, and from what I can tell there have been discussion on the side about how to “harvest” what is ripe right now. But India has objected to this approach. Since it would require consensus among all WTO members, it is hard to imagine this happening in the context of the Doha Round. It is unfortunate that India—which has gained so much from market access for its exports through existing multilateral agreements—now appears to be standing in the way of developing countries who want to make similar progress. It is a very odd and disconcerting turn of events.

Q: What will be the impact of Doha’s collapse on poor people in developing countries?

A: The real impact of the collapse is unclear as there was so much that remained to be negotiated. But if the question is whether what was on the table would have provided significant economic benefits to those living in poverty, the short answer is no. Granted the U.S. offer would have forced some real constraints on subsidies available under the current farm legislation. Similarly, reforms that are being undertaken in the EU’s Common Agriculture Policy would have been locked in. And some benefits would have been derived from cuts to bound tariff rates. But most of the important issues for developing countries remained undecided. Subsidies on cotton; tariffs on bananas, textiles, and clothing (so-called “sensitive” products excluded from tariff reductions); preference erosion on key exports; and, of course, safeguards all remained unresolved, so it is difficult to calculate whether there would have been a net gain or a loss as a result of the agreement. Indeed, one of the most sensitive issues—anti-dumping—was not even mentioned. Nonetheless, developing countries had far better leverage to negotiate with rich countries as a group in a multilateral forum like that in Geneva than they do individually. The asymmetries they will face in a post-Doha world -- asymmetries in power and in negotiating capacity -- will not necessarily be conducive to economic development or poverty alleviation.

Q: What should rich countries be doing with respect to trade policy to help developing countries in lieu of a multilateral deal?

A: The next step requires innovative approaches that will allow developing countries to better integrate themselves into the global supply chain and, in this manner, obtain the investment they need to exploit trade opportunities and promote economic growth. This means taking a critical look at existing trade agreements and preference programs and examining what works and what doesn’t. In particular we should be looking for opportunities for poor countries to leapfrog past old industries and into new technologies of the future. Rich countries should work to coordinate the preferences they offer to developing countries to try to ensure that benefits obtained from one country are not squelched by another. Rich countries should also integrate their trade agreements, preference programs, and development assistance programs so that they reinforce each other. In short, there is quite a lot we can and should do, even without a Doha Round.

WTO talks collapse: the poor and farmers lose

from the Australian

This story has some opinions from farmers and poor advocates in Australia. They say the trade deal would have given the poor a chance in the worsening economy. - Kale

FARMERS and the world's poor will be the losers from the collapse of world trade talks in Geneva overnight, advocates say.

The World Trade Organisation talks, which aimed to salvage a global free trade pact, collapsed after the US, China and India failed overnight to agree on when poor countries could raise import tariffs on farm products.

National Farmers Federation president David Crombie said the breakdown would prevent farmers from selling into new and expanded markets.

"The breakdown of negotiations in the Doha Round of WTO trade talks is another dismal result for Australia's farmers and agricultural exporters," Mr Crombie said.

Agricultural domestic support limits among OECD countries would not be reduced and market access would not be improved.

With the world food shortage biting hard, Mr Crombie warned developing countries would be the "biggest long-term losers" from the world trade impasse.

Oxfam acting executive director James Ensor blamed rich countries for the impasse, saying it was not fair for them to force poorer countries into heavy trade concessions.

"They defended vested interests and put poor countries under intense pressure to make concessions that have no place in a development round," Mr Ensor said.

Link to full article. May expire in future.

WTO Talks collapse: in battle over farm aid

from the Washington Post

This story serves as an overview of this round of talks, and the issue that ended them. - Kale
By Anthony Faiola and Rama Lakshmi

International talks aimed at ushering in a new era of free trade collapsed in Geneva yesterday during a bitter split between developed and developing countries over the future shape of global commerce.

The failure of the talks after nine days of intense negotiations underscored what is likely to be the biggest challenge in coming years to expanding world trade: the reluctance of emerging juggernauts such as India and China to risk their newfound success by offering rich nations greater access to the hundreds of millions of consumers rising out of poverty in the developing world.

High-level delegations from the United States and the European Union showed fresh willingness at the World Trade Organization talks to make concessions that would have gradually curbed the subsidies and tariffs they have long employed to protect First World farmers. But India and China dug in their heels, insisting on the right to keep protecting their farmers while accusing the United States and other rich countries of exaggerating the generosity of their concessions.

"The breakdown of these talks is bad news for the world's businesses, workers, farmers and most importantly the poor," said Thomas J. Donohue, president of the U.S. Chamber of Commerce. "It's ironic that this blow . . . came from two of the chief beneficiaries of worldwide trade. India and China are emerging powers, but with great power comes great responsibility. They missed an opportunity to show leadership as key players in the global trading system."

The result is what most experts concede is at least a temporary mothballing of the Doha Round of trade talks, so named because a group of nations agreed to work toward dramatic new cuts in subsidies and trade tariffs in Qatar's capital, Doha, in 2001. The talks have floundered for the past seven years, with negotiations falling apart each time trade ministers have gathered to try to hash out an accord.

The WTO meeting of more than 35 nations in Geneva that ended yesterday had been described by officials as a "do or die" moment for the round, with the lack of agreement postponing the $50 billion to $100 billion injection such a deal was expected give the global economy. The sense that the failed talks may not get another chance anytime soon is linked to the pending exit of the pro-trade Bush administration, rising opposition to farm concessions in Europe and an upcoming changing of the guard of several key trade officials who have worked on this agreement for years.

Some analysts said the spread of free trade for now is likely to shift toward more modest bilateral agreements, or the expansion of regional trading blocs such as South America's Mercosur and the Association of Southeast Asian Nations. Yet even bilateral deals have recently faced stronger resistance during a growing global wave of protectionism, including in the United States, where free trade agreements with Colombia, South Korea and Panama are being held up by opposition in Congress.

"We are heading toward the fragmentation of the global trading system into individual trading blocs -- regional and bilateral -- which offer no guarantee for the economic benefits we have seen in the post-War era," said Randall Soderquist, senior trade program associate for the Center for Global Development.

The talks in Geneva at times took on a highly charged, personal tone that immediately cast the negotiations as a power struggle between the developed and developing worlds. Within 24 hours of landing in Geneva nine days ago, Brazil's foreign minister, Celso Amorim, infuriated First World negotiators, comparing their efforts to hype their proposed trade concessions to Nazi propaganda. His comments drew sharp reprimands, particularly from Washington's top negotiator, U.S. Trade Ambassador Susan C. Schwab, the daughter of Jewish Holocaust survivors.

Yet Brazil would later show far more flexibility than India or China, casting the Asian nations as the principle holdouts.

Schwab said negotiators were "so close" last week in reaching an agreement. But the talks fell apart over the insistence by developing nations to reserve the right to protect their farming sectors against sudden surges in cheap food imports. India's chief negotiator and commerce minister, Kamal Nath, may have played the biggest role in undoing the talks, repeatedly blocking attempts by developed nations to win greater access to India's burgeoning market.

Nath's inflexibility was cheered as heroic in India, where his refusal to offer major concessions to rich nations was being portrayed as a classic David vs. Goliath case.

"I kept saying 'No, I don't agree' at every point," Nath said in a telephone interview from Geneva yesterday. "I come from a country where 300 million people live on 1 dollar a day and 700 million people live on 2 dollars a day. So it is natural for me, and in fact incumbent upon me, to see that our agricultural interests are not compromised. You don't require rocket science to decide between livelihood security and commercial interests."

Opposition to the talks had been building in India since June, when 35 farmers groups from across that nation gathered at a conference in New Delhi to discuss the implications of the trade negotiations with trade and food policy activists. They called upon wealthy nations to remove their farm subsidies, saying such assistance to First World farmers denies a level playing field to subsistence-farming nations such as India.

Link to full article. May expire in future.

WTO talks collapse: Reaction from World Leaders

from the Raw Story

Here is another story on the WTO talks collapse. This story gathers reaction from leaders across the globe. - Kale

World powers reeled with regret and emotion on Wednesday from the collapse of WTO negotiations for a global trade pact, warning that the poorest countries would suffer.

"It is particularly distressing for us that we find ourselves without an agreement today," US Trade Representative Susan Schwab told a news conference, as delegates reviewed the wreckage of nine days of talks.

She lamented that tense talks had broken down on deadlock over special import tariff measures, after certain countries rejected WTO proposals.

"It would have worked, and yet there were others who demanded more. and more included a tool to close markets," Schwab said, without naming names.

Delegates who went into many late nights in an attempt to reach a deal affecting the lives of populations around the globe, said that deadlock had centred on a row between the United States and India over tariffs.

Kenya's trade minister meanwhile warned that the breakdown of talks "gravely undermined" efforts by African countries to fight poverty.

Ministers had struggled for nine days to reach consensus on subsidy levels and import tariffs for a new deal under the WTO's Doha Round, which has foundered repeatedly since it was launched seven years ago.

Delegates said negotiations stumbled on proposals for so-called SSM measures to protect poor farmers that would have imposed a special tariff on certain agricultural goods in the event of an import surge or price fall.

"Africa's opportunity to achieve fair trade has... been gravely undermined by the lack of progress in these negotiations," the minister, Uhuru Kenyatta, told a news conference, speaking on behalf of a grouping of African countries at the World Trade Organization talks here.

"Africa critically needs to realise development and get itself out of poverty through the establishment of fair trade rather than aid," he said.

Several delegates hoped on Tuesday for further moves to salvage the negotiating process in light of progress that had raised spirits over the weekend. But momentum seemed to have ground to a halt.

"It's extremely difficult to find words to express the disappointment," said EU Commissioner Mariann Fischer-Boel in an emotional address on Tuesday. "It's a truly sad day for the developing countries that had so much to gain."

"We will need to let the dust settle a bit," the World Trade Organization's Director-General Pascal Lamy said. "WTO members will need to have a sober look at if and how they bring the pieces back together."

The world's economic superpower, the United States, and India, one of the world's biggest emerging economies, were sharply divided over the SSM -- the special safeguard mechanism.

"I feel very disappointed that this had to be left unresolved in the last miles," India's Commerce Minister Kamal Nath told reporters. "It's unfortunate that in a developing round, the last miles we couldn't run" due to the SSM.

India and other developing countries wanted the mechanism to kick in at a lower import surge level than has been proposed in order to protect their millions of poor farmers from starvation. Nath said that about 100 developing nations backed his position.

Others wanted it to take effect at a higher rate so as not to hurt exporters.

Ministers avoided publicly pointing the finger of blame. European Union Trade Commissioner Peter Mandelson said on Tuesday that the collapse was a "collective failure."

Link to full article. May expire in future.

WTO talks collapse: a reaction on how it effects Africa

from AFP via Google

The WTO talks have collapsed due to an arguement between India and the US. Here is a reaction on how the absence of an agreement will effect Africa. - Kale

GENEVA — The breakdown of talks on a world trade pact has "gravely undermined" efforts by African countries to fight poverty, Kenya's trade minister warned on Wednesday.

"Africa's opportunity to achieve fair trade has... been gravely undermined by the lack of progress in these negotiations," the minister, Uhuru Kenyatta, told a news conference, speaking on behalf of a grouping of African countries at the World Trade Organization talks here.

"Africa critically needs to realise development and get itself out of poverty through the establishment of fair trade rather than aid," he said.

"Most of the key issues of interest to the African continent were not even discussed, especially the issue of cotton."

WTO Director-General announced on Tuesday that the latest negotiations for a much-delayed trade liberalisation deal under the so-called Doha Round had broken down after nine days due to unresolved differences.

Delegates said the deaddlock centred on a row between the United States and India over special tariff measures to protect poor farmers from surging imports or price falls.