Looking back on Doha
UK minister Gareth Thomas looks back on the failure of world trade talks in Geneva that he believes
After 10 days of trade talks in Geneva between ministers from countries ranging from Burkina Faso and Lesotho to the US and China, the latest attempt to get agreement in the current “Doha Development Round” of world trade talks broke up with no agreement.
The questions now ministers are beginning to think through, individually here in the UK, is when the talks can be restored and if that isn’t soon whether and how to go ahead with regional trade agreements (trade talks for example between the EU and India or the EU and groups of African and Caribbean countries).
Agreement would have provided the global economy with a much needed confidence boost, would have reformed world agriculture models and helped tackle growing protectionist sentiment. It would have delivered real benefits for the world’s poorest countries and provided a platform for new opportunities for British businesses in sectors as diverse as chemicals, machinery and financial services.
The three key areas of talks were firstly agriculture, where the considerable subsidies the EU, US and other rich countries have traditionally given to their farmers were under scrutiny, secondly industrial markets and lastly services for example financial services, insurance and professional services (legal, and the like).
We pushed hard in Geneva for a deal that was both good for development and good for the UK. We for example pressed for cuts to trade distorting farm subsidies, an ambitious reduction in particular for cuts in cotton subsidies – a key concern for some of Africa’s poorest countries; Benin, Mali, Chad and Burkina Faso and for agreement on trade in bananas a source of tension between two key groups of developing countries for over ten years. We also promoted special and differential treatment for developing countries. By the end of the talks the EU had committed to lock in an 80 per cent cut in trade distorting subsidies and a 60 per cent cut in tariffs into EU markets while the US had accepted the principle of a cut of some 70 per cent of their trade distorting agricultural subsidies.
Real progress was made too on trade in industrial products such as cars, chemicals and machinery (with smaller cuts in tariffs on their goods when made in developing countries) and strong signals were sent on future trade in services like banking and accountancy.
In the end the talks broke up over the special safeguard mechanism, which allows developing countries to temporarily raise tariffs to address import surges, and prevent subsistence farmers - for example - going out of business. The principle of the rules has been accepted for a long time but agreement couldn’t be reached on how and when they could be used, despite over 60 hours of talks on this issue alone.
The challenge now is to build trust between the key negotiators to resolve this issue and restart talks which are running up against the rapidly approaching roadblock of US, Indian and European elections, with the inevitable pause as negotiators change
The sheer complexity of the talks caused by the vast differences in the perceived interests of World Trade Organisation members is one reason why these talks have taken so long and why many promote regional trade agreements as a simpler and quicker route to new business opportunities.
It is however the very multilateral nature of the organisation that gives the WTO its strength. We need a set of rules for the world economy that is fair for developing as well as developed countries, that give the smallest countries the space to be heard and listened to as well as granting new opportunities for trade between the richer countries.
We are ever closer to a deal that will substantially recast the roles within the world’s trading system. The prospect of such a deal is what kept countries like Lesotho, Burkina Faso and other developing countries through to the end of the falls.
The EU will of course be pressing ahead with bilateral trade negotiations but there is no giving up on the prospect of a deal on the DDA talks and we will over the coming months be discussing how to progress them with the many other countries in the WTO who want a deal.