Rare victory for South at WTO
It was a close call. Till the last minute, suspense became
overbearing. Glued to our seats and teetering on the brink of fear, with
abated breath we awaited the outcome of the last-minute efforts to save
an unjust and inequitable Doha Round deal.
And as news started to trickle in signalling the collapse of the WTO
mini-Ministerial, a sigh of relief emerged. After all, a tsunami has
been averted observed Devinder Sharma, a New Delhi based food and trade
policy analyst reflecting on the collapse of the World Trade
Organisation (WTO) talks in July to liberalise world trade.
It has become a tradition among the Western media outlets in recent
years to blame India, China and sometimes Brazil and South Africa for
the failure of yet another round so-called trade liberalisation talks.
This was the third time in seven years that the WTO talks failed.
Started in the Qatar capital of Doha in 2001, this round was dubbed as
the development round by the WTO, to deflect criticisms from the
developing countries of the South that WTO is only interested in opening
up market for rich nations in developing countries, irrespective of
whether these help their development or not.
WTO indicated that the failure of the talks would cost the world $
130 billion in lost trade opportunities. As usual they never say how and
who would have benefited by how much.
However, such fortune-teller yarns are all too willingly disseminated
by Western news agencies and find their way into the newspapers of the
South, whereas comments such as India’s Commerce Minister Kamal Nath are
rarely given the prominence it deserves.
He stated that the U.S. wanted to enhance the commercial interests of
its large agri-business corporations whereas developing countries like
India wanted to ensure that the livelihood of its farmers are protected.
Nath told journalists upon his return to New Delhi that, the U.S.
created the deadlock on an issue, which was not trade but related to
livelihood of farmers. I can negotiate commerce but I cannot negotiate
livelihood security which concern poor farmers not only of India, but
100 other developing countries he said.
The breaking point in the Geneva talks came on the exact modalities
of devising the Special Safeguards Mechanism (SSM) in the Agreement on
Agriculture that allows a country to temporarily increase customs
tariffs in response to a surge in import volumes or a sharp decline in
prices. India and China wanted a 10 percent surge to be a cut-off point
whereas the U.S. wanted the proportion to be 40 per cent.
A coalition of 46 developing countries known as G33 have proposed
that the SSM be made available to all the developing countries rather
than the 22 proposed in the original WTO document. Developing countries
argued that they needed to use this to facilitate the development of
their own agricultural capacities and to increase domestic food
According to FAO statistics, import surges that is sudden and rapid
price rises on imports has been a major development problem for a myriad
of developing countries. Between 1980 and 2003 there have been 12,167
import surges which have effected 102 developing countries with the
poorest hit the most.
Writing for the South-North Development Monitor (SUNS), Sharma points
out that the Western media has misled the world by reporting that the US
and EU have made a huge sacrifice by offering drastic cuts to their
trade-distorting farm subsidies.
In reality, the US proposal of reducing its trade-distorting
subsidies by 70% (and the EU following with a promise of 80% cut) was
simply an eye-wash argues Sharma.
These were merely paper cuts, and behind this smokescreen, both the
rich trading blocks had actually ensured provisions that enable them to
keep or increase the actual levels of their trade-distorting subsidies.
:The US presently pays US$7-9 billion as trade-distorting subsidies,
and what it had offered as a sacrifice was to enable it to increase
these subsidies further to a maximum of $14.5 billion. For making these
paper cuts, the US and EU wanted the developing countries to pay a high
price by way of providing more market access in agriculture and industry
Yash Tandon, executive director of the Geneva-based South Centre
noted that these negotiations have been flawed in both process and
substance, and the undemocratic nature of WTO negotiations, where a
privileged few countries are invited to hammer out a deal has not
As long as the development component of the Doha Round does not
become its central concern and focus, it will continue to fail. Trade is
not an end; it is a means to development.
If the WTO continues to remain a neo-liberal institution promoting
trade liberalisation for its own sake, it stands to lose credibility and
legitimacy. The WTO must reform itself to become a development agency
and put trade to the service of development argues Tandon.
Many advocates for greater democracy within WTO sees the collapse of
the Doha Round talks as a victory for the South countries. As the South
Centre put it: Even if the developed countries were not hearing well,
developing countries did not let their development issues slip off the
table. This has only been possible due to the strong developing country
coalitions that have been built up.
Thanks for India and China taking a strong stand and as Sharma
observed picking up the courage and standing up to the two bullies — the
United States and European Union, the exclusive processes of
negotiations are now outmoded. What G33 should ensure in future is that
WTO follows the more transparent process, as done at the UN, in
negotiating texts, more in line with openness, transparency and
We have missed the chance to seal the first global pact of a reshaped
world order lamented EU Trade Commissioner Peter Mandelson in a
statement released after the collapse of the talks.
We have never sought to be paid for reform of our farm subsidies in
Europe by receiving market access in developing country farm markets. We
have always accepted that the gains for us in this round would be found
in new industrial and service sector trade in the developed and bigger,
fast-growing developing countries, he added.
But, this is a familiar mantra of the EU ever since the WTO came into
being in the early 1990s and the EU or even for that matter WTO has
failed to provide any hard credible facts to back up their argument that
opening up of markets have helped developing countries, especially the
Thus, Sharma tends to agree with the view of the Indian Trade
Minister. There is no bigger crime than to sacrifice the livelihoods of
an estimated three billion small farmers in the developing world for the
sake of higher profits to a handful of agribusiness companies he argues.
The writer is a Singapore-based journalist, media analyst and
international communications lecturer.