Disappointment at Doha, but it wasn't all America's fault. Is BP having too much bad luck? And Wolfowitz demands that the World Bank stops corruptionby P L / September 24, 2006 / Leave a comment
Doha derailed—who to blame?
So much for the lofty rhetoric about freeing trade and aiding development; when it came to the crunch, governments instead bowed to corporate protectionism. Thus the Doha round—launched after 9/11 as WTO members rallied around America in a show of unity—has collapsed in acrimony, with most blaming the US for its demise. This is not fair. America was guilty mainly of being too ambitious: it offered to prune its agricultural subsidies if others sheared their farm tariffs, but India and the EU refused.
Officially the round is indefinitely suspended, but there are already hopes of reviving it early next year. Besides, optimists point out that while 12 years have elapsed since the previous round was completed, globalisation continues apace and the world economy is booming. Such complacency is misplaced. If a deal can’t be done when the going is good, perhaps it can’t be done at all. After all, the only break in the WTO’s run of failure—Seattle, Cancún, Hong Kong and now Geneva—was the Doha launch, when circumstances were truly exceptional. Next year hardly looks promising: President Bush is set to lose his power to push through trade deals without congress unpicking them, precluding US negotiators from striking a credible bargain with other WTO members; a new farm bill that could entrench America’s contentious subsidies is in the offing; and an economic downturn could sharpen fears about trade-related job losses. But if the round remains on ice for too long, the WTO risks being sidelined, with the benefits of global competition, multilateral rules and impartial adjudication giving way to tit-for-tat protectionism and a web of bilateral arrangements that privilege rich-country companies at the expense of the poor.
BP’s biggest blunders If petrol costs over £1 a litre next time you fill up, blame BP. Oil prices spiked to nearly $80 a barrel when it announced it was shutting down America’s biggest oil field—possibly until 2007—to repair leaky pipes. The lost production from Alaska’s Prudhoe bay is only a tiny fraction of global output, but oil supplies are so tight—and speculators so frenzied—that the slightest disruption sends prices rocketing. (The terrorist threat to air travel and the fragile ceasefire in Lebanon have since pushed prices down somewhat—at least for now.) But in any case, the damage to BP could be great. The issue is not so much the financial cost of lower output and…