Africa, Development & Aid, Economy & Trade, Food and Agriculture, Global, Global Geopolitics, Global Governance, Headlines, Trade & Investment, Trade and poverty: Facts beyond theory

TRADE: “A Doha Round Collapse Is a Betrayal of Poor Countries”

Isolda Agazzi

GENEVA, Apr 21 2011 (IPS) - “It would be bad news for poor countries in Africa if the Doha Round of trade talks fails. This round was meant to rebalance the rules of world trade in favour of developing countries. We have put a lot of resources and hopes into this process and a collapse would be a big betrayal for us.”

This is the position of Abdoulaye Sanoko, counsellor at Mali’s mission to the World Trade Organisation (WTO) in Geneva, speaking to IPS in an interview.

“However, we don’t want to conclude the round at any cost, but rather to emphasise its developmental aspects. In contrast, the big stakeholders are stressing market access.”

Nobody knows exactly how least developed countries (LDCs) would be affected by a collapse of the round. A study requested by the African, Caribbean and Pacific (ACP) group has not been started.

But LDCs would be happy with a conclusion on the round on the basis of the current (2008) negotiating texts as “it would be better than losing everything”, Sanoko added.

However, Romain Benicchio, trade policy officer at Oxfam International in Geneva, differed: “We do need a multilateral agreement that responds to the needs of poor countries, but one can doubt that what is on the table now would really benefit them.” Oxfam is

Recently, WTO director general Pascal Lamy acknowledged that the round “could fail”. The U.S.’s demand that large emerging markets slash tariffs in entire industrial sectors have led to seemingly insurmountable differences with Brazil, India and China.

In Geneva, some diplomats are starting to look for a “soft landing” to salvage the progress achieved to date, in case the one-to-one high-level meetings organised by Lamy don’t lead to anything.

Benicchio agrees that a collapse would hamper the expected gains of the round. “However, what is on the table now is far from being a panacea and it is not clear whether these gains would effectively materialise”, he told IPS.

One of the expected outcomes was 100 percent duty-free and quota-free market access for LDCs to developed countries’ markets.

But the current text involves only 97 percent of tariff lines “and there is no clarity on which products would be excluded by the U.S. and other industrial countries. So, de facto, these exclusions could include the main exports of LDCs”, Benicchio noted.

The same goes for cotton where gains could be expected, “but we have not seen any progress since the Hong Kong ministerial conference of 2005”, he said, adding that the U.S. renewed its subsidies in 2008 and has not implemented the recommendations of the Dispute Settlement Body following Brazil’s complaint.

Instead, Washington has committed itself to giving 150 million dollars a year to a research fund on Brazilian cotton and to undertake the necessary reforms only in 2012. “And we still have to see if this will be politically feasible. So, today the U.S. is subsidising Brazilian producers in order to keep subsidising its own,” he commented.

“In many of the areas where LDCs have made proposals, there has barely been any progress due to the resistance by many developed countries,” Sanya Reid Smith, senior researcher at Third World Network (TWN) in Geneva, told IPS. TWN is an international nongovernmental organisation with headquarters in Penang, Malaysia.

“For example, the special safeguard mechanism that allows LDCs to address import surges, including by increasing their tariffs above pre-Doha bound rates if needed, has been made more and more unusable.”

She added that, although LDCs are exempt from cutting tariffs, many LDCs (especially in Africa) that are members of customs unions that include non-LDCs will have to cut tariffs by the amount that the non- LDCs are required to, unless the customs unions are given exceptions.

“So far these exceptions have not been given. Based on the current texts, LDCs in customs unions will have to cut their tariffs, resulting in a permanent loss of government revenue, increased competition from imports and worsening balance of payments,” Reid Smith noted.

For Benicchio, another lost cause in the event of a Doha collapse is the services waiver for LDCs, where industrialised countries would grant facilities to services exporters from LDCs, especially in mode four, the ability of their unskilled workers to work in developed countries.

“But this decision is not guaranteed anymore,” he said. There is only a proposal on the table and it could go one way or another.”

He admits that in some issues there will be no result anyway, like the proposal by African countries to limit the price volatility of agricultural products, or the request to facilitate WTO accession of LDCs without imposing too strict conditions on them.

“But there are alternatives for LDCs if the Doha Round is not concluded,” Reid Smith pointed out. For example, WTO members legally have the option to have an early harvest on certain issues, such as duty- free and quota-free market access and cotton. It is just a question of political will on the side of developed countries.

Sanoko concurred: “We have always asked for an early harvest and many things have been announced. Stopping everything now would be a real pity.”

He explained that a revision of the General Agreement on Tariffs and Trade (GATT, the WTO’s predecessor) article XXIV is essential, but it is not going forward. “This article stipulates that in regional and free trade agreements (FTAs) the parties have to liberalise most of the exchanges but without specifying how much.

“It is most important that it should be amended to include a good dose of special and differential treatment so that, among other things, when poor countries negotiate FTAs with developed ones, they don’t have to reduce so many of their tariffs,” Sanoko stated.