Rich nations shatter Doha hopes of fair trade

BEIJING, Aug. 6 --After a nine-day negotiation, the

crucial ministerial meeting for trade ministers from some 35 major World Trade

Organization (WTO) members collapsed last week.

The meeting had been expected to be the last chance for a conclusion of the long-stalled Doha Round this year. Yet it failed to do so for the ministers were "simply not able to bridge their differences," according to WTO Director-General Pascal Lamy at a press conference.

WTO Director-General Pascal Lamy attends a press conference at the WTO headquarters in Geneva, Switzerland July 29, 2008. (Chinese media Photo)
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The conflicts between the developed and the

developing countries were so sharp about the agricultural trade that they became

the direct reason for breakdown of the negotiation.

Before this negotiation was started, a plan was

raised by WTO officials as a possible solution to agricultural trade, one of the

most controversial areas in previous talks of Doha Round: Special Safeguard

Mechanism (SSM) for developing countries.

When the developing countries see a surge of

agricultural imports, like a quick rise of import volume over 40 percent in a

given period, they could raise their import tariff to protect domestic farmers.

However, such a solution did not help the talks. The

developed countries did not want to cut their agricultural subsidies while

several key developing countries held that the WTO should allow developing

countries to resort to more flexible protection for their own markets as well as

for their domestic agricultural producers.

As a matter of fact, this negotiation was scheduled

at a wrong time. Several leaders of the developed countries are close to the end

of their terms. Any compromise in the Doha Round negotiations might bring them

endless trouble. So their best choice is to express their positive positions

without making any concrete promise in the trade talks.

The developing countries have long had a grudge about

the high agricultural subsidy in the developed countries. They felt it hard to

accept when the developed countries wanted a full access of agricultural

produces to their markets.

Therefore, the talks were almost set to collapse

before they even started.

Agricultural trade is unique. The developed countries

are not necessarily more competent in their agriculture, but their produces

become really inexpensive compared to those from the developing countries thanks

to the high subsidy given to farmers out of political interests.

From the angle of trade benefits, the developing

countries should have welcomed the low-priced imports of agricultural produces.

But the import surge might push a large group of farmers to the edge of

bankruptcy.

In short, the political choice of governments is

behind the differences over agricultural trade. The agricultural subsidy in the

developed countries was granted to maintain their political interests while the

developing countries hold their position about agricultural market access to

protect their domestic farmers.

It is the author's long-held opinion that the WTO has

become too large as an organization for it always tries to settle all the trade

issues through a package of trade talks. It has been proven by facts that a

negotiation mechanism involving hundreds of members could hardly bear any

substantial fruits.

The latest meeting was obviously organized in an

effort to avoid the above predicament because it was meant to focus on the

agricultural trade.

However, most developed countries are seeing an

economic slowdown at this moment and it was impossible for them to write off

their agricultural subsidy. So, a tariff negotiation is unlikely to settle the

imbalance in agricultural trade.

In other words, agricultural trade is such an

extensive issue related with the interests of so many parties that it is not to

be settled smoothly even though the WTO wanted to exclude other trades from the

talks this time.

Many scholars think the WTO would keep playing a key

role in settling global trade conflicts for its function is irreplaceable.

Certainly, we hope it could do so by balancing the trade between the West and

the East and easing the disputes between the developed and the developing

countries.

However, it is no more than a multilateral

negotiation scheme with special functions of setting trade codes and settling

disputes. It is not going to change the unreasonable order of international

trade.

The developed countries are often active in pushing

the WTO to revise the trade rules because they are usually big trade powers.

Since the WTO only accepts the revision after most members vote for it, the

developed countries could hardly gain further benefits from changing the rule to

their own advantages.

It is their natural choice to establish regional

trade agreements or sign free trade agreements with selected partners instead of

remaining in the WTO framework.

The biggest advantage for the developing countries to

become WTO members is to gain the rights of setting trade rules. Yet, it depends

on the common wish of the developed and the developing countries to eliminate

unreasonable rules and establish a balanced order for trade and economy around

the world.

If the developed countries refuse to compromise their

own interests, it will remain a dream for the developing countries to gain fair

trade by revising trade codes within the WTO framework.

Many developing countries are also exploring the

possibility of economic cooperation through regional arrangements. They could

sign free trade agreements and set up regional trade partnerships, and through

both they could realize free trade.

Therefore, it is natural for the developing countries

to feel dissatisfied with the WTO framework, which could not bring them the

interests and benefits that they could enjoy from regional trade partnerships.

Of course, the WTO has many jobs even after the

collapse of the Doha Round. It needs to re-examine its working style and promote

the negotiation based upon an analysis of the politics of major countries.

The author is a professor with Zhongnan University of

Economics and Law

(Source: China Daily/By Qiao

Xinsheng)

WTO members seek way out of Doha Round impasse

GENEVA, July 30 (Chinese media) -- Members of the World Trade Organization (WTO) were in a rush on Wednesday to seek way out of the current impasse of the Doha Round talks after a crucial bid for a breakthrough collapsed.

A meeting of all the WTO members was called Wednesday to analyze the consequences and what should be the next steps, at which WTO Director-General Pascal Lamy urged delegates to have a time of reflection instead of making a hasty decision. Full story