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WTO-SPECIAL: New Talks, Same (Empty) Promises?
By Emad Mekay
WASHINGTON, Dec 8 (IPS) - Groups advocating fair global trade say next week's World Trade Organisation talks in Hong Kong will not help lift up poor people in developing nations, as has been promised by officials in industrialised nations and their allies at international financial institutions.
A number of international civil society groups have issued an array of statements and reports that strongly dispute claims by rich nations that trade liberalisation would be a catalyst for development in poor nations.
"What was meant to be a 'development round' has been turned on its head, with powerful interests like the EU (European Union) and the U.S. demanding greater and greater concessions from poor countries, but giving very little in return," said the advocacy group Oxfam in a report released Wednesday.
Ministers from 148 countries are due to meet next week in Hong Kong to kick-start stalled World Trade Organisation (WTO) global trade talks. The crucial talks, formally called the "Doha Round" because they were initiated in the Qatari capital in 2001, are seen as a critical yardstick in expanding free trade initiatives, scheduled to be finalised by the end of 2006.
At issue are hefty agricultural subsidies that rich nations give to their farmers, which remain the main sticking point in the run-up to the meetings.
The Dec. 13-18 gathering will seek to remove global trade barriers in goods and services, and to break an impasse created when trade diplomats last met in Cancun, Mexico in 2003.
Last week, the WTO released a draft negotiating text and talked about "starting points" and the necessity for success in Hong Kong for the world's global development. But civil society groups were quick to argue that the WTO draft offers hollow guarantees..
"The draft text is full of empty rhetoric on development," said the Institute for Agriculture and Trade Policy (IATP), U.S.-based think tank. "None of the proposed commitments address the bottom line: this deal will leave the world's poorest countries, and the majority of WTO members, worse off," the group said.
Fair trade advocates fault the round and the draft text because it continues to trumpet trade liberalisation as a catalyst for development when there is a growing consensus among many economists, civil society groups and some developing nations that the benefits of trade liberalisation have been wildly exaggerated.
The groups say that the talks have reversed the original intent of the development round and may actually increase the imbalances between rich and poor countries.
"The current round of negotiations is not delivering on what it was designed to do: help developing countries," said Raymond C. Offenheiser, president of Oxfam America. "What's on the table now would not promote development and could even do more harm than good. Poor countries should not have to sign up to such a deal."
At the receiving end of accusations that it inflates the benefits of trade is not only the WTO, but also organisations like the International Monetary Fund and its sister institution, the World Bank.
On Wednesday, World Bank President Paul Wolfowitz referred to a controversial Bank study claiming that tariff reform could deliver annual global gains of 300 billion dollars by 2015. He suggested that this is why developing nations should sign on to agreements in Hong Kong.
"The World Bank estimates that full liberalisation of trade in goods alone could generate 300 billion dollars per year for the global economy," Wolfowitz said. "Developing countries would gain 86 billion dollars of this share. And these numbers can grow as producers in poor countries take advantage of new markets."
But an analysis of the study by the Centre for Economic and Policy Research, an independent research organisation in Washington monitoring trade issues, says that the nearly 300 billion dollars in extra revenues represent only 0.7 percent of world Gross Domestic Product (GDP) in 2015, a negligible increase.
"A country that would have an income per person of 1,000 dollars annually in 2015 if there is no trade liberalisation would have 1,007 dollars in 2015 if there were complete liberalisation of merchandise trade," explained Mark Weisbrot, co-director of CEPR.
The group says that the near 300-billion-dollar gains would be from a complete liberalisation scenario, which is not expected from the Doha round. The Bank's estimate of gains from more realistic scenarios is much smaller - between 17.9 billion and 119.3 billion, or just 0.04 to 0.28 percent of world GDP.
"It's strange to see the potential gains from the Doha round exaggerated so vastly beyond what standard economic research indicates," said Weisbrot,
Some of the reports released ahead of the meeting by non-governmental organisations show that the EU, Japan and the United States do not practice the free trade they preach, as they pay out more than 250 billion dollars a year to support their agriculture sectors.
Other groups say that the world's largest transnational corporations, and not developing nations, are the main driving force behind the current world trade system and that they stand to gain the most.
About two-thirds of world trade is now accounted for by just 500 companies, and 40 percent of world trade occurs within these companies. Although the world's top 200 companies account for one-quarter of world economic activity, they employ less than one percent of the global workforce.
"The myth of unfettered free trade as a solution to poverty needs to be exploded," said Ronnie Hall of Friends of the Earth International. "What we need now is a halt to trade liberalisation negotiations and an urgent review of the impacts of international trade rules on the impoverished and the environment," she added.
(END/2005)
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