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TRADE: Doha Deal Won’t Come Cheap, Activists Warn

Emad Mekay

WASHINGTON, Mar 8 2006 (IPS) - Six leading economic powers will meet in London this weekend to try to jumpstart long-stalled global trade talks, amid opposing appeals from anti-poverty advocates who say a deal would worsen conditions in developing countries and business lobbies promoting the benefits of market access.

Trade ministers of the Group of Six (G6) – Australia, Brazil, the European Union, India, Japan and the United States – will meet on Mar. 11-12 in the British capital to discuss the completion of the World Trade Organisation’s ambitious Doha Development Round, which started in 2001 in the capital of Qatar with the ultimate purpose of creating a barrier-free trade system.

Talks are expected to focus on farm goods and non-agricultural market access, industrial tariffs and trade in services like technology and communications.

“We hope that all six nations are entering this meeting in London with a real commitment to making progress and that they are ready for serious bargaining,” said Mary Irace, vice president of the National Foreign Trade Council (NFTC), a U.S. business lobby group.

But anti-poverty campaigners argue that industrialised nations and their corporations are overstating the benefits of free trade for poor nations, which stand to lose jobs and tax revenues.

“Far from fighting poverty as initially promised, rich countries are pushing for a trade deal that could leave poor countries tens of billions of dollars worse off. India and Brazil, as the only developing countries invited to this meeting, must stand up to the pressure and reject this bad deal,” said Adriano Campolina Soares, an activist with ActionAid Brazil.

Last December’s World Trade Organisation ministerial meeting in Hong Kong made little progress on many contentious issues, although a timeframe of 2013 was set for the elimination of farm export subsidies. An important Apr. 30 deadline to reach a broad agreement on tariff-cutting formulas is approaching with no major change in the negotiating positions in areas like manufacturing and financial services.

The European Union and Japan have refused to offer significant new market access for agricultural goods, while the United States made its approval for further opening its markets conditional on that of the EU and Japan and of major developing countries.

Washington has also resisted reducing trade-distorting domestic agricultural support, a crucial demand for poor nations.

India and Brazil, two key nations in the talks, say they will not be able to unlock trade in manufactured goods and services without concessions from rich nations on agriculture, among other things.

A mini-ministerial meeting held in Davos, Switzerland in late January failed to change those negotiating dynamics.

“So the talks echo the old ‘Alphonse and Gaston’ routine, in which each side waits for the other to move forward – and consequently neither side moves at all,” said a new analysis summarising the talks’ status by the Institute for International Economics in Washington.

Business groups fear that if a deal is not reached in London, the round will not be concluded this year as planned, possibly leading to the loss of lucrative business opportunities. They believe that if the G6 succeeds in London, and if Brazil and India make major concessions, other developing nations will follow suit.

“Time is running out on Doha. Every opportunity to advance the talks is critical,” said Scott Miller, director of national government relations for the U.S. consumer products giant Procter & Gamble.

Free trade advocates are mustering their efforts to push for a deal. The NFTC will bring a delegation of its members to Geneva in April to convey its support for substantial results in the Doha Round – its eighth visit to Geneva since the round was launched Doha.

Anti-poverty campaigners, however, put forth a moral argument as well figures and data disputing much-touted benefits from free trade.

ActionAid, one group that has followed the talks closely, says that the global trade deal being discussed by the G6 could cost poor countries 63 billion dollars from cuts to taxes on international trade alone, as well as hundreds of thousands of jobs.

The United Nations had said that will contrast with the 96 billion dollars the industrialised countries are expected to gain – about 83 percent of the total gains from the round of talks.

According to its analysis, ActionAid says that job losses in the car industry alone could be as high as 10,000 in Brazil, 16,000 in India and 180,000 in China as foreign automakers enter local markets and displace domestic industry. The losses could run into millions when indirect suppliers are taken into account, especially in India.

As for Brazil, ActionAid says that the Latin American nation will actually see a total loss of 160 million dollars, since its 3.6-billion-dollar gain from increased agricultural exports would be countered by 3.1 billion dollars in losses from lower taxes on manufactured goods entering the country, an estimated 530 million dollars from agreements on intellectual property and another 30 million dollars in annual bills for implementing WTO agreements.

“Unless the talks take a radical change in direction from the framework agreed at last December’s WTO ministerial in Hong Kong, poor countries will lose out whilst rich countries and their corporations reap the benefits,” said the group.