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TRADE: Cloudy Skies for Doha

Gustavo Capdevila

GENEVA, Jul 21 2008 (IPS) - The most optimistic WTO trade negotiators are perhaps taking solace in the old saying “it is always darkest before the dawn.”

Bleak is the word that could describe the outlook facing trade ministers from some 35 countries who set out on crucial talks Monday aimed at reaching an agreement on the controversial Doha Round of multilateral trade talks.

But in sharp contrast were the conciliatory statements by many of the ministers taking part in this week’s talks, which are scheduled to run through Saturday with the goal of reaching a breakthrough in the trade liberalisation negotiations launched by the WTO (World Trade Organisation) in the capital of Qatar in November 2001.

The darkest stage of the Doha talks is occurring now, when the final outcome of nearly seven years of negotiations appears to lie just ahead and the participating countries and blocs are stubbornly digging in their heels on their bargaining positions.

The European Union, for example, said it is clear that it will make no further concessions.

The General Affairs and External Relations Council of the European Commission, the bloc’s executive arm, began to meet Monday in Geneva to supposedly oversee the negotiations by its representative, Trade Commissioner Peter Mandelson.

France, which currently holds the EU rotating presidency, has criticised Mandelson for purportedly intending to make more concessions in agriculture.

“We are the most generous in terms of market access. We cannot go further,” said French Agriculture Minister Michel Barnier after the EC council meeting.

Developing countries, which from the start of the Doha Round have been fighting to eliminate the tariff barriers and subsidies of the EU, United States and other industrialised countries, object to the size of the duties that European countries collect on imports of their farm products.

Mandelson told the ministers that “in our initial offer we tabled a 36 percent reduction in our average agriculture tariffs,” and that “we are now offering to cut them by a minimum of 54 percent!”

“On agriculture, the EU will be the major net loser in any deal,” he declared.

The United States took a similar line. U.S. Trade Representative Susan Schwab portrayed her country as a kind of scapegoat of negotiators who criticise it for the subsidies it shells out to its farmers, while they avoid talking about the opening up of agricultural and industrial markets.

The reference to the freeing up of industrial markets alludes to a group of developing countries, including India, South Africa, Brazil and Argentina, which want to limit tariff cuts in order to build up their budding industries.

These emerging economies also voiced their positions. Referring to the proposed draft accord on agriculture, Brazilian Foreign Minister Celso Amorim said “the text was built on a logic of accommodating exceptions rather than seeking ambition. Almost 30 of the paragraphs in the agriculture text establish specific carve-outs for specific countries.”

The text on industrial tariffs or non-agricultural market access (NAMA), “on the contrary, was built on the logic of forcing countries, especially developing ones, out of comfort zones,” he said. “Although some flexibilities were lately introduced, the logic of the NAMA still has a totally different nature. Issues to be solved are much more straightforward,” he added.

Argentina, for its part, once again had harsh words for the NAMA text. Foreign Minister Jorge Taiana said that “as for the NAMA draft, our opinion is that the text is not fit for this horizontal process, since the Chair has not factored in the text the views of those developing countries effectively reached by its dispositions.”

Taiana said that “accepting that average cuts for developed countries could be lower than those for developing countries is completely out of the question.”

Criticism also came from the Group of 33 (G33), made up of 46 developing nations, which is demanding favourable conditions for Special Products (SPs) that could provide protection for small farmers, as well as the Special Safeguard Mechanism (SSM), aimed at preventing a flood of farm imports.

The bloc, represented at the WTO meeting by Indonesian Trade Minister Mari Pangestu, was disappointed by the “third revised draft text” because it excludes the “essential and crucial elements of SPs and SSM, constantly called for by the G33.”

This standoff formed the backdrop to the start of the ministerial meeting in which WTO Director-General Pascal Lamy is expected to present a draft agreement Friday encompassing the two pillars of the Doha Round – agriculture and NAMA.

Over the next five days, the ministers and other representatives of the global body’s 153 member states will attempt to come up with formulas to eliminate discrepancies on the two issues.

WTO spokesman Keith Rockwell said that at Monday’s opening sessions, the ministers expressed strong support for concluding the two texts, which could speed up convergence on the rest of the points in the Doha talks, such as services, intellectual property and WTO rules.

Lamy stressed “the need to conclude the Doha Round in order to stimulate and stabilise the world economy.”

Amorim concurred, saying “It is important to shore up confidence at a time when the international economic environment is under stress.”

Non-governmental organisations, meanwhile, complained about the potential effects of the Doha Round.

Nathan Irumba of the Uganda-based Southern and Eastern African Trade Information and Negotiations Institute (SEATINI) noted that “When the Doha Round was launched, it was stressed that the interests of developing countries would be at the heart of the negotiations.

“The fundamental question to ask,” he added, “is whether Africa and other developing countries will be better off after the Round.

“Unfortunately, the deal that is on the table has little development content. All studies, even (by) the World Bank, have said that Africa will be worse off,” Irumba asserted.

Sago Indro, head of Via Campesina in Indonesia, remarked that 12 years after the creation of the WTO, “Indonesian farmers are facing extremely difficult circumstances, particularly in recent years, during the food crisis.

“During the first ten years of the WTO, food imports, like rice, soya, wheat, meat and oranges flooded our markets, depressed prices for farmers, and destroyed our production capacity,” he said.

“Now the price of food in the international market is very expensive, and Indonesian farmers, who are also consumers, can no longer afford food. Even the government is in a difficult situation,” said Indro.