WTO: Why negotiations always have skewed results


Last week, the world’s trade ministers pledged to complete the Doha Round of trade negotiations at the World Trade Organisation (WTO).

The Ministerial Conference in Geneva was intended as a retreat of sorts for the world’s trade ministers, to allow them to reflect on the workings of the WTO and to send a signal about its relevance to the economic crisis and to climate change.

Rather than take the opportunity for a proper rethink, the chance to push for a final reboot of negotiations has proven irresistible, especially to Director General Pascal Lamy who has called for a rush to finalise a deal in 2010.

Trade ministers are not doing the WTO any favours by pretending that its rules have borne up well to the challenge of current crises or by insisting that the Doha round will improve matters.

Responses to the global economic downturn highlight some of the inherent imbalances in WTO rules.  The ways in which rich country governments can help their economies are deemed legal according to these rules, although few would argue they were not protectionist.

The World Bank has criticised the G20 for breaking its 2008 promise not to resort to such measures by slapping on additional tariffs or doling out million dollar bail outs to struggling industries.

By contrast, West African countries cannot find WTO-legal solutions to stop the brown-meat chicken parts, rejected by European consumers but too expensive to dispose of here, being sold off below cost in their markets, destroying livelihoods of poor farmers.

The UN’s Food and Agriculture Organisation found that 1,500 poultry farmers in they Ivory Coast ceased production during a period of import surges in the early 2000s. The government has reacted, but at the risk of legal action at the WTO.

The Doha round is not on track to change this. Negotiations to provide a workable safeguard to help developing country farmers hit by import surges did not make it on to the negotiating table in earnest until 2008 (despite the problem having been on the agenda from the start).

Even then it was used as a political football to stall talks before the sticky topic of US cotton subsidies came to the fore, according to some observers.

The WTO also risks falling short in its ability to support the fight against climate change. The current thrust to liberalise trade and investment in green technologies is too limited an agenda to deliver low carbon development in developing countries.

Rules that help locally-based companies to emerge to provide appropriate and accessible technologies will be critical in ensuring developing countries have a stake in this sector, essential to their long-term development prospects.

Weak provisions in the WTO agreement on intellectual property have failed to ensure promised technology transfer to least developed countries since 1994.

Just like the IMF and World Bank, the WTO suffers from a crisis in its representation – less because of its voting structures, but because of the way it works – busy agendas negotiated under pressure to strict deadlines emphasize rather than bridge the differences in capacity of its members.

A report for the G77 developing country grouping, reported that the average size of a developing country delegation to the WTO in Geneva in 2002 was 3.81 delegates, and that 23 developing country WTO members have no mission at all in Geneva.

By contrast the European Union has in total of 114 Geneva-based delegates, thanks to the combined capacity of its member states and the European Commission. Small wonder that the results of WTO negotiations are skewed and look set to remain that way.

An institution that supports rules-based global markets and ensures that building them is a complementary not competing goal to poverty eradication and climate change objectives, is critical.

Rather than continue with business as usual, trade ministers need to send a strong signal that they have understood the need for change.

Posted by Christina Weller, CAFOD’s economist

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