TRADE: ‘The Ball Is in the Western Court’

By IPS Correspondents Reprint | | Print |

Stefania Bianchi

BRUSSELS, Feb 19 2004 (IPS) - Leaders in the EU and the United States must take "decisive steps" to end protectionism in order to revive the stalled Doha Development Round, a leading official says.

"Decisive steps must be taken by the EU and the United States to dismantle protectionism in agriculture and to make sure that subsidies are cut," World Bank chief economist François Bourguignon said at a meeting of the World Bank and the European Policy Centre here Wednesday.

"The world must realise that there is no alternative to Doha," he said. "There is no close substitute. We are negotiating on something essential."

The current round of world trade talks, the Doha Development Round aims to reach agreements in such critical areas as agricultural trade, trade in services and industrial tariffs.

The negotiations under the World Trade Organisation (WTO) were launched in Doha in Qatar in 2001. They were scheduled to conclude this year, but are months behind schedule.

Talks in the Mexican beach resort Cancun broke down last September mainly over the estimated 350 billion dollars a year rich countries spend on farm subsidies, and on the new issues the European Union (EU) wants to raise. These include trade and competition policy, trade facilitation, and transparency in government procurement.

Forty-four developing countries, including India, China and the least developed countries want only trade facilitation among these new issues to be considered. Their prime demand is for the West to drop subsidies and open up its markets.

U.S. Trade Representative Robert Zoellick wrote to other WTO members last month to resume talks with a stripped-down agenda. Earlier this month EU trade commissioner Pascal Lamy urged poorer countries to tell him which subsidies they wanted the EU to dismantle.

But the EU and the United States have made few moves on their own to cut subsidies or to open up their markets.

"Free trade and market liberalisation will provide the most fundamental results," Bourguignon said. "Every country in the world would have an interest in freeing trade."

But the WTO negotiations will not succeed unless members are prepared to make concessions, Bourguignon said. "There will be no international market if each partner doesn’t open up. For a win-win situation there have to be concessions from both sides."

Bourguignon said partial liberalisation was "not an option" and that regional negotiations such as the EU’s economic and partnership agreements (EPAs) with countries in eastern and southern Africa were no substitute for the Doha Round.

"Regionalism can actually be counteractive to multilateral negotiations," he said. "Preferences can create a trap for developing countries which is difficult to get out of."

Head of Uruguay’s EU mission Elbio Rosselli supported this view. "Regional negotiations discriminate against those countries on the outside of the agreements," he said.

Officials differed sharply on such agreements. EPAs are supportive of the Doha Development Round because they involve the same issues for the same countries, said Martin Dihm from the European Commission’s directorate- general for trade.

"By strengthening their capacity within the EPAs, developing countries can also strengthen their capacity in Geneva and the World Trade Organisation," he said.

But a leading non-governmental organisation (NGO) says an alternative needs to be found to the Doha Round.

The United States and the EU must "give up their corporate-driven trade agenda, exchanging it for a progressive approach to developing fair and sustainable economies that work for everyone," Alexandra Wandel from Friends of the Earth International told IPS.

The EU and the United States should not attempt to revive the talks, she said. "Now is the time for governments around the world to realise that the current WTO does not deliver fair and sustainable economies."