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TRADE: Few Tears Over Collapse of Talks

Gustavo Capdevila

GENEVA, Jun 21 2007 (IPS) - The four trading powers making up the so-called G4 – Brazil, the European Union, India and the United States – passed a hot potato back to the World Trade Organisation (WTO) when they announced Thursday in Potsdam, Germany that negotiations for an agreement which could have kickstarted the Doha Round of multilateral trade talks had collapsed.

WTO Director General Pascal Lamy, who like a large number of developing nations was never overly keen on the G4 parallel negotiations, reacted swiftly by calling an informal meeting Friday of the Trade Negotiations Committee, which is in charge of leading the Doha Round of talks, launched in 2001 in the capital of Qatar.

But while the members of the G4 were mutually blaming each other for the failure of what were to be five days of talks but ended after less than three, a majority of developing countries, worried about the secrecy surrounding the negotiations, raised their voices in Geneva to complain that their key concerns have been ignored.

“The recent WTO negotiating process has been less than transparent and participatory,” protested the African, Caribbean and Pacific Group of States (ACP), the African Group, and the Least Developed Countries (LDCs), which together make up the Group of 90 (G90) developing countries, which emerged during the fifth WTO ministerial conference held in Cancun, Mexico in 2003.

The G90 Plus – the new name taken on by the group since Bolivia and Venezuela joined – said “The majority of members have little or no knowledge of the progress and content of the G4 process.”

The statement issued by the G90 Plus argues that although two of the G4 members, Brazil and India, are developing countries, “they cannot be expected to carry the responsibility of representing the views of all developing countries.”

The G90 Plus thus marked its distance from Brazil and India just a few hours after the fiasco in Potsdam was made public, although in the past few weeks, the trade media had reported critical comments on the role the two nations were playing in the G4.

The talks once again tripped up over the differences between rich and poor countries with respect to the dismantling of the agricultural subsidies of the industrialised North and market access for non-agricultural products, with developing nations defending their right to protect their national industries.

The WTO’s latest failure triggered a broad range of reactions on the future of the trade talks and even the multilateral trade system itself.

Peter Hardstaff, head of policy at the World Development Movement, said “the fact that the Doha Round is on its last legs is welcome. We can only hope someone will see sense and finally kill it off.”

Aileen Kwa, with the Thailand-based Focus on the Global South, told IPS ‘’I think that the future of WTO is under threat. The way in which it has been working so far since the beginning is not working any more.”

As a result of the growing leadership role taken on by developing countries, « it will be very difficult for the issues that are important to them to be sidelined. The importance I think for us is that leadership element,” said Kwa, who added that “the G90 has come together.”

Carin Smaller at the U.S.-based Institute for Agriculture and Trade Policy said that “instead of accepting the current trajectory of trade talks, it is time to take a proper break, learn from past mistakes and completely rethink the rules of the WTO.”

Aftab Alam Khan, head of the London-based ActionAid’s Trade Justice Campaign, said “We are not expecting any development outcomes in the current negotiations. It is now time to review the global trading rules in favour of poor countries.”

“The EU and U.S. appear to be competing to extract the biggest concessions from developing countries, while giving as little as possible in return,” said Marita Hutjes, acting head of Oxfam’s Make Trade Fair Campaign.

The G90, meanwhile, declared that its members continued to support the multilateral trade system, although it warned that the system should not be used to legitimate decisions reached by a handful of countries.

Kwa said the delegations were not likely to reject a continuation of multilateral talks. But she predicted that the negotiations could tend to trip up in the future over the same obstacles that led to the G4 collapse, « the big numbers in agriculture, the trade-distorting domestic supports, and the coefficients” to be used for cutting industrial tariffs.

“Development concerns have been left behind in the rush to agree to a deal in the Doha Round. Content cannot be sacrificed for timelines,” argued the G90.

Kwa said she never believed the Doha Development Round was ever really about development, despite its name.

At any rate, the Focus on the Global South activist said « I don’t think the WTO is going to really affect world trade. I mean world trade has been increasing exponentially in the last few years without any round. So that will continue. So I don’t think that this collapse is going to affect world trade.”

In addition, she said, developing countries, especially India and China, are growing in economic power and will continue to do so, “with or without the round. I think if we keep things at a slower pace it would be even better for the majority of developing countries that are lagging behind in terms of economic development.”

This will help developing countries, and Africa in particular, in the long run, she argued, “because the round was not going to be a gain for them.”

Kwa recommended taking things “a bit slower,” and not pushing for the freeing up of trade before poor countries are ready.