TRADE: Agreement Still a Long Way Off

By IPS Correspondents Reprint | | Print |

Stefania Bianchi

BRUSSELS, Aug 2 2004 (IPS) - While top trade officials are commending themselves on breathing new life into the stalled Doha Round of trade talks over the weekend, interest groups say the negotiations have a long way to go before a satisfactory deal is reached.

The World Trade Organisation (WTO) agreed a framework for the multilateral trade talks Sunday (Aug. 1) which aims to revive the delayed Doha Development Round (DDR).

The main focus of the agreement is the cutting of agricultural subsidies and other aid to farmers from rich countries. This is in return for developing countries opening markets for manufactured goods.

Speaking after the marathon talks ended Sunday, top trade players expressed satisfaction with the outcome.

European Union (EU) trade commissioner Pascal Lamy said the conclusion was not only good for the EU, but also for developing countries and others. “Today’s decision shows that the multilateral trading system is alive and kicking. But we have only walked half of the way: we need now to rapidly conclude this round,” he said.

Agriculture commissioner Franz Fischler said it was a “really a good day for the world economy, for Europe and especially developing countries.”

Some trade officials from developing countries also said they were satisfied with the conclusion.

Brazil’s foreign minister Celso Amorim who was leading the G20 group of developing countries at the talks said the agreement marked “the beginning of the end for subsidies.”

But many non-governmental organisations (NGOs) say the deal for a negotiating framework was only reached after rich countries pressured developing countries, and was the result of undemocratic procedures and intense pressure.

The groups also point out that the deal to scrap rich nations’ agriculture subsidies remains vague with no set date mentioned in the end text.

“The commitment to eliminate export subsidy credits is missing any substance as no end date is mentioned,” said Friends of the Earth (FoE), the world’s largest grassroots environmental network.

Oxfam International also stresses that “much more work still needs to be done” if the round is to achieve the stated objective of making world trade fairer.

“We are three years into negotiations, yet the results of this meeting fall far short of what is needed to reform world trade rules so that they work for the poor. The lives and jobs of millions of people depend on these talks but rich countries are still failing to show leadership, pandering instead to vested interests and forcing developing countries to adopt a strategy of damage limitation,” said Jo Leadbeater, head of Oxfam International’s Brussels office.

A further concern of the NGOs is that in a rush to secure a deal, wealthy countries turned a blind eye to potential environmental and social implications of the package.

FoE warns that the deal could “threaten people and the environment worldwide.”

It says the agreement on Non-Agricultural Market Access (NAMA), which proposes to include effectively all natural resources for either partial or complete liberalisation, will continue to threaten the environment and developing country economies.

“If adopted, the WTO negotiations could further deepen the de-industrialisation crisis in these countries, thus accelerating unemployment and poverty, and forcing countries to rely more heavily on unsustainable and harmful exports of natural resources,” the environmental group said.

The group adds that Sunday’s agreement also puts “undue” pressure on developing countries to open up service sectors.

FoE says this poses a threat to the ability of countries to regulate basic services in the pursuit of social and development goals.

“Governments are trading away our environment at the WTO. With this deal, even more environmentally and socially sensitive sectors will be liberalised. Corporate lobby groups will be the big winners, the environment and the poor the big losers,” said Alexandra Wandel of FoE Europe.

The declaration also set a new deadline for the completion of the talks – December 2005, when a ministerial will be held in Hong Kong.

Oxfam warns that the deadline leaves a short amount of time in which members need to achieve an “awful lot”. It stressed that the time restriction must not be allowed to lead to a dilution of the original ambitions of the round.