425 views update:Feb 5, 2007

WTO in crisis

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The collapse of negotiations among 60 Ministers of 149 member Nations of the WTO has created a crisis situation with profound implications for the populations of both industrialised and developing countries.  By Simon Shane

The collapse of negotiations among 60 Ministers of 149 member Nations of the WTO has created a crisis situation with profound implications for the populations of both industrialised and developing countries.


It has been five years since the pivotal Doha Round which was to establish a new era in international trade. The advancement of poor nations dependant on agricultural-based economies was to have been stimulated by new multilateral agreements on tariffs and subsidies.


The present impasse lends credence to the adage "the devil is in the details", as intransigence, obstinacy, chauvinism; self-interest and inflexibility have dominated negotiations.


The issues in contention include reduction and the ultimate lifting of import tariffs imposed on agricultural products by industrialised nations, operating to the detriment of developing countries. The latter in turn are accused of levying duties on manufactured goods and capital equipment produced by the EU and North America. Agricultural support programs applied in the US and the EU are major obstacles to agreements. Major blocs complain that there is insufficient equity in subsidies to maintain levels of fair competition. Quotas and improper imposition of phytosanitary regulations to protect domestic industries are obvious impediments to free trade, the ultimate objective of the WTO.


The Director General of the WTO, Pascal Lamy adjourned the three-day meeting on Saturday July 1st with the intention of reconvening later in the month.


Resolution of differences will require concessions and major shifts from the positions adopted by the US, the EU and the Cairns Group among others. Even if agreement is achieved by the end of July, representatives will have to address a lengthy process of documenting and ratifying decisions.


Legislation granting the President of the USA to conclude trade agreements expires at the end of December 2006. Given the prevailing political climate it is unlikely that this latitude will be extended. It is now the responsibility of the WTO Director General to engage in serious diplomacy to achieve a breakthrough of tectonic proportions to create a climate favoring rapid adoption of a new comprehensive agreement predicated by Doha 2001.


Uplifting millions from poverty and advancing standards of health, education and stability in many nations will depend on retraction from preordained negotiating positions and approaching free trade with a broader and longer term view among governments and their WTO representatives.


By: Simon Shane

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