Events & Issues

New Delhi, 21 November 2011

WTO PLEDGE

HAS IT FAILED DEVELOPING WORLD? 

By Col. (Dr.) P. K. Vasudeva (Retd)

The ensuing eighth session of the Ministerial Conference of the World Trade Orgainsation (WTO) to be held in Geneva in mid-December has a tall order. Member countries have called for action on trade and development issues, especially those that would benefit the least developed countries (LDCs). However, it has been observed that for the past ten years since the WTO pledged to deliver pro-development changes, developing countries have been completely sidelined by the global powers United States, European Union and Japan.

Farmers in Ivory Coast handpick cotton in a field near Korhogo, around 500 km north of Bouake. The breakdown of talks on world trade has "gravely undermined" efforts by African countries to fight poverty. 

Ten years ago, a new WTO had proposed developing countries’ needs at the centre of the international trade negotiation agenda. The Ministerial Declaration adopted at the start of the Doha Development Round of trade negotiations, on 14 November 2001, was a promising response to the anti-globalisation riots of the 1990s.  

However, the WTO membership has failed to deliver the promised pro-development promised agenda. Finding "development" in the Doha Development Round today is like looking for a needle in a haystack. Developing countries and the LDC have been completely sidelined by the economic and political interests of global powers. This is no hearsay. Supporting 10 examples as to how the WTO has failed the poor need to be highlighted and beg the Conference’s attention. These are:  

One, Cotton: The Fairtrade Foundation revealed in 2010 how the $47 billion in subsidies paid to rich-country producers in the past ten years has created barriers for the 15-million cotton farmers across West Africa trying to trade their way out of poverty, and how five million of the world's poorest farming families have been forced out of business and into deeper poverty because of those subsidies.

Two, Agricultural subsidies: Beyond cotton, WTO members have failed even to agree how to reduce the huge subsidies paid to rich world farmers, whose overproduction continues to threaten the livelihoods of developing world farmers. India cannot compromise with the fate of 115 million farmers for food security reasons.

Three, Trade agreements: The WTO has also failed to clarify the deliberately ambiguous rules on concluding trade agreements that allow the poorest countries to be manipulated by the rich states. In Africa, in negotiations with the EU, countries have been forced to eliminate tariffs on up to 90 per cent of their trade because no clear rules exist to protect them.

Four, Special treatment: The rules for developing countries, called “special and differential treatment” (S&DT) rules, were meant to be reviewed to make them more precise, effective and operational. But the WTO has failed to work through the 88 proposals that would fill the legal vacuum.

Five, Medicine: The poorest in developing countries are unable to access affordable life saving medicine because members have failed to clarify ambiguities between the need for governments to protect public health on the one hand and on the other to protect the intellectual property rights of pharmaceutical companies.

Six, Legal costs: The WTO pledged to improve access to its expensive and complex legal system, but has failed. In 15 years of dispute settlement under the WTO, 400 cases have been initiated. No African country has acted as a complainant and only one least developed country has ever filed a claim.

Seven, Protectionist economic policies: One of the WTO's five core functions agreed at its inception in 1995 was to achieve more coherence in global economic policy making. Yet the WTO failed to curb the speedy increase in the number of protectionist measures applied by G20 countries in response to the global economic crisis over the past two years – despite G20 leaders' repeated affirmations of their "unwavering" commitment to resist all forms of protectionist measures.

Eight, Natural disaster: The WTO fails to alleviate suffering when it has the opportunity to do so. In the case of natural disaster, the membership will have taken almost two years to agree and implement temporary trade concessions for Pakistan, where severe flooding displaced 20 million people in 2010 and caused $10 billion of damage. Those measures, according to the International Centre for Trade and Sustainable Development (ICTSD), would have boosted Pakistan's exports to the EU by at least €100 million this year.

Nine, Decision-making: The WTO makes most of its decisions by consensus – and achieving consensus between 153 countries is nearly impossible. But this shows another failure of the WTO: to break the link between market size and political weight that would give small and poor countries a voice in the trade negotiations.

Ten, Fair trade: A decade after the start of the Doha Development Round, governments have failed to make trade fair. As long as small and poor countries remain without a voice, the role of campaigning organisations, such as Tradecraft and Fairtrade Foundation, which are working together to eliminate cotton subsidies, will remain critical. The US has only promised to reduce subsidies on cotton but it has failed to stick to its promise so far resulting in the loss to four cotton-producing countries of Africa.

Indeed, the WTO has failed to live up to its promises over the past decade, which reveals a wider systemic problem in the global community. True and lasting solutions to global economic problems can only come when the model of global competitiveness between countries becomes one of genuine cooperation. Sensing the clear need to advance rapidly, the next Ministerial Conference is making the requisite preparations but the big question is whether it can be hopeful of any relief to developing countries on the reduction of trade distorting countries by the developed countries. Will it move forward?---INFA

(Copyright, India News and Feature Alliance)