The Doha round will not fail, but neither will it live up to expectationsby Jack Thurston / December 17, 2005 / Leave a comment
It ought to be good news that the current round of WTO trade negotiations is finally getting serious. The world needs an example of international co-operation to cheer about.
Ever since the repeal of the corn laws, most economists have agreed that trade barriers are a bad thing and that freer trade promotes economic growth. Add in the idea of making trade a tool for poverty reduction in the global south, and the current Doha “development” round looked like a promising model for international solidarity in the 21st century. So why have we had to wait four years for things to get going, and why are so many people depressed about the likely outcome?
Each round of trade negotiations has taken longer to complete than the previous one. This is because each round increases both the number of member countries at the negotiating table and the number of issues up for discussion. The rule that every member has to agree every part of the deal makes it inevitable that ever more time is needed. The previous Uruguay round lasted almost eight years and we have just begun year five of the Doha round. While many have seen it in their interest to spin December’s Hong Kong ministerial summit as “make or break,” in reality there is still a long way to go. A final agreement is extremely unlikely before the end of 2007.
Most agree that the round badly needs progress in agriculture, the sector that retains the greatest barriers to trade and that is the most important for developing countries. Things recently got moving when the US offered to cut its farm subsidies by an impressive 60 per cent if the EU followed suit. Peter Mandelson, who as trade commissioner negotiates on behalf of all 25 EU member states, responded with an offer that did not quite match the US but was sufficiently ambitious to anger France and other countries that benefit disproportionately from generous farm subsidies. (These offers came in addition to an agreement to end agricultural export-dumping that the US and EU made last year.)
There is now enough on the table for the Hong Kong summit to go ahead, but the small print of each offer leaves ample wiggle room to preserve subsidised European and American farms. What is more, the US offer is conditional on getting access to new markets for its farm exports,…