After seven years of analysis and fine-tuning, nine quarrelsome days was all it took for the main actors at the World Trade Organisation’s Doha talks to realise that they couldn’t, after all, make a deal. The failure will be variously interpreted in the weeks and months ahead. Europe and the US will blame the “developing world” (an increasingly inaccurate label for a host of strange bedfellows) for scuppering agreements that, however compromised and imperfect, would have helped poor countries trade their way out of poverty and underdevelopment.
India, China and Brazil will point to America’s double standards (even the EU’s Peter Mandelson described a recent batch of American agricultural subsidies as “one of the most reactionary farm bills in the history of the US”) and harp on its insensitivity to the job security of millions of workers whose livelihoods could disappear if markets in the developing world are exposed to the full force of global trade too hastily. Smaller, poorer countries – particularly those in Africa, which was almost entirely left out of the horsetrading that preceded the breakdown of the talks – will have to accept that fairer trade agreements, and the Millennium Development Goals which they were meant to serve, have probably become unattainable, at least not anytime close to the ambitious initial target date of 2015.
The impasse was predictable. Two years ago a British journalist noted that a single “draft agreement on agriculture markets” which was to be debated at a special session in Geneva contained no fewer than “760 pairs of brackets, each of which will be fought over in the coming week.” With a stronger sense of common purpose these brackets could probably have been weeded out, but the self-interest and mistrust among the competing economic blocs has only deepened since then. America’s fondness for unilateral action in the Bush years hasn’t helped, nor have its strained relations with Europe, but the problem is wider than that. Faced with the difficulty of selling potentially perilous multilateral agreements (many of them so complex that they were only partially understood by the governments who signed them) few countries have been willing to take the political risks that a whole-hearted embrace of the Doha agenda would have required.
A senior World Bank analyst has described the challenge of implementing the Doha proposals in a developing country as one of “inducing major trading partners to improve market access; ensuring that any multilateral trade rules support economic development; and convincing domestic stakeholders that there are significant net positive payoffs from further domestic trade reforms that are locked in via the WTO.” Stated so plainly these tasks sound deceptively simple, but they usually require a great deal of economic and political wisdom, and a willingness to accept serious compromises. Quite often they set up contradictory obligations to foreign investors and local industries. Occasionally they create demands that are simply unrealistic. The political effort needed for the final item alone is probably enough to deter most governments in the developing world from taking their WTO commitments too seriously. In fact the persuasion of domestic stakeholders has often seemed beyond the capacity of prominent members of the European Union.
Trade is an unavoidably contentious subject in a globalised world. By any measure our current imbalances are striking. After the Uruguay round of trade talks, for example, nearly half of the economic gains from future reforms are expected to come from agricultural and processed food policies in countries belonging to the Organisation for Economic Co-operation and Development (OECD).
Given such a contrast it is unlikely that either side will ever be able to take the other’s economic arguments in good faith. Unfortunately the last seven years of diplomacy have assumed such a conversion is possible, if disagreements are bracketed and reworded with enough patience. That hope vanished this week and with it any prospect of salvaging any useful new trade agreements before the next US elections. Remarkably, these talks failed even though they took place in the context of a global food crisis, an oil shock and the rapid slide back into poverty of millions of people from all over the world. ‘Trade not aid’ has turned out to be another slogan, ‘the end of poverty in our time’ an illusion that must yield to political quarrels between developing and developed economies. No consolation to the forty per cent of the world that struggles to live on US$2 a day, or the thousands of children that die each day from preventable illnesses or hunger. The collapse of the Doha agenda may be a bitter disappointment for all who have worked on its many complexities for so long, but for the poor and powerless whom it was meant to rescue it is simply another tragedy.
