THE collapse of the WTO talks this week has been portrayed by the WTO, industrialised country governments and the media as a setback for the global economy, and as most damaging to developing countries.  They were meant to benefit from the so-called Doha Development Round of negotiations to expand free trade. The spin also blames developing countries for the collapse.

But the spin has been undermined by the franker assessment of the financial media. Bloomberg financial analysts stated baldly that the benefits of the Doha round had been “overstated” and that the value of the round “narrowed to as little as $50 billion annually from as much as $850 billion when the Doha Round of talks began in 2001.”

Even World Bank assessments of the economic impacts of trade liberalisation show that most of this modest growth would have gone to richer countries.
In fact, the collapse of the talks has been greeted with relief and celebration by many poor farmers, unions and other civil society groups in developing countries.

This is because, despite the “development” tag, rich countries have failed to address effectively the issues raised by developing countries which would actually assist their development. This is despite WTO rules of “special and differential treatment” which are supposed to recognise that developing countries need higher tariffs and other measures to enable development to occur. Industrialised countries, including Australia, all have a history of higher tariffs and other measures in the past which assisted their development.

In agriculture, the US and EU made only token moves to reduce unfair export subsidies, with the US Congress recently passing new subsidy legislation. This means small farmers in developing countries still face unfairly subsidised imports which threaten their livelihoods. The trigger for the collapse of the talks was the refusal by rich countries to agree to the conditions for developing countries to have protections for small farmers threatened by sudden rises in imports, called the “special safeguard mechanism.”

On industrial goods, the proposals included deeper tariff cuts for developing countries which would simply destroy jobs and reduce their capacity for industrial development. 

The trade in services proposals would have pressured governments to open up more essential services to transnational investors and privatization. The propsals would also have reduced the regulatory space available to all governments to ensure that services meet the public interest. Liberalisation of financial services would also tend to exacerbate the current global financial sector crisis. More, not less, regulation is needed to make financial institutions accountable and responsible.

AFTINET has campaigned against these services proposals, and against the inclusion of the current exploitative Visa 457 provisions for temporary workers in the WTO services agreement (GATS). The collapse of the talks means that these damaging changes will not proceed.

AFTINET and other civil society groups around the world have campaigned against the WTO proposals and for a fairer global trade system.

The collapse of the negotiations should be seen as an opportunity, not a disaster. The Australian government should not engage in the blame game, but should recognise that the global trade system needs to change to address the needs of developing countries.

The government should note the recommendations of the independent report of the Warwick Commission of academics and trade experts, published earlier this year. This recommended a review of WTO rules and structures to address the concerns of developing countries, and the development of new rules and structures based on fairness, justice, development and environmental sustainability.

Dr Patricia Ranald

Dr Patricia Ranald
The collapse of the negotiations should be seen as an opportunity, not a disaster. The Australian government should not engage in the blame game, but should recognise that the global trade system needs to change to address the needs of developing countries.