WTO TALKS COLLAPSE AND THE BIRTH OF A NEW WORLD ORDER

By Jonas Gahr Store and - - Reprint | | Print |

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OSLO, Aug 11 2008 (IPS) - There is a clear lesson to be drawn from the unsuccessful WTO negotiations held in Geneva July 21-29: the world is witnessing a shift of power in the arena of the world economy and world trade as new states with growing economies and political ambitions are asserting themselves, writes Jonas Gahr Store, Foreign Minister of Norway. In this analysis, Gahr Store writes that we could have paved the way for the next major round of negotiations, on climate change in Copenhagen next year. Perhaps I was present at the collapse of a world order, the author writes, but at the same time, I witnessed the birth of a new world order where all countries are present and demand their rights, and that requires an almost unlimited willingness to negotiate, make compromises, and find sustainable solutions. We must use our failure in Geneva as a spur for the development of a world order that involves more states, a shift in the power balance, and essential new tasks relating to climate change, the environment, labour rights, and the fight against poverty.

For nine days I was part of a series of contests of strength in today’s world of power politics. But rather than on a battlefield, they were taking place around the negotiating table where rights and obligations in world trade are meted out.

For seven years, the countries of the world have been negotiating an agreement intended to promote trade, cut tariffs, and remove other barriers to trade, with a special emphasis on opening up opportunities for developing countries, which were for the first time the focus of a round of trade negotiations. The rich countries were to take on greater obligations, and the poorest countries were to be shielded. The developing countries were to be helped to build their own capacity for trade – Aid for Trade. Tariffs for fish and industrial products were to be cut.

And for the first time, agriculture was put firmly on the agenda: the rich countries were to cut domestic production subsidies, export subsidies, and tariffs. Countries with rapidly- growing economies were to be given better market access.

The WTO was to find a package solution to all these issues. The organisation has 153 members and makes decisions on the basis of consensus. This is a hugely complex process, in which all countries must make a contribution and all gain something. There have been many ups and downs over the years.

In Geneva, we met for one last effort. India and China were demanding a safeguard mechanism that would be triggered by a surge in agricultural imports. The US felt the proposed conditions that would trigger the mechanism were too lenient and so would limit trade. The US and other countries, including Australia, New Zealand, and Brazil, want increased market access for exports from their efficient agricultural sectors. Many developing countries are justifiably concerned about the consequences. We tried to find a compromise, but the US and India refused to give way. WTO director-general Pascal Lamy had to recognise that we had come to a dead end, at least for now.

Even more important, we could have paved the way for the next major round of negotiations, on climate change in Copenhagen next year. In negotiations focusing on development and poverty, the rich countries must be prepared to shoulder greater burdens while the developing countries must accept their share of responsibility.

Perhaps I was present at the collapse of a world order. But at the same time, I witnessed the birth of a new world order where all countries are present and demand their rights, and that requires an almost unlimited willingness to negotiate, make compromises, and find sustainable solutions.

Only a few years ago, it was the US and the EU that decided the outcome of such conflicts. If they agreed on a solution, it was generally accepted. Those days are over. Now, nobody can ignore countries like India and Brazil. Together, they speak on behalf of about 100 developing countries.

And for the first time, there is a newcomer in the circle of major countries that call the shots – China. China speaks as a developing country, and together with India it has been demanding rights for the developing countries.

Even though these two countries have lifted millions of people out of poverty, there are, for example, many more people living in poverty in India than in the whole of Africa. But there is much more to China. In private talks with colleagues from Asia, I have heard that it is not exports from the US and the EU they fear most but the Chinese export juggernaut.

At the other end of the scale, countries in West Africa are counting on the WTO to pressure the US into reducing the high level of subsidies for exports of cotton, which are wiping out the cotton industry in poor African countries.

We recognise that the situation is serious, but responsible leaders must also look to the future. We must not lose everything we have achieved through negotiations over the last seven years. None of the solutions we have agreed on in this period will take effect until we reach agreement on the entire package. So we must make every effort to resume the negotiations once the dust has settled from this collapse. And we must retain the WTO as a key organisation in the world economy.

Thus, we must use our failure in Geneva as a spur for the development of a world order in keeping with a new age. One that involves more states, a shift in the power balance, and essential new tasks relating to climate change, the environment, labour rights, and the fight against poverty. (END/COPYRIGHT IPS)