Success at this week's trade talks is critical. But are they doomed from the start, ask Nick Mathiason and John Madeley
Sunday November 4, 2001 The Observer
The United States is hated by poor nations because they believe the world's superpower manipulates global trade rules and imprisons them in debt. Europe, with its huge subsidies to farmers and its tight, protected markets, is little better in their eyes. High-profile debt relief initiatives have failed. Only 13 per cent of the $100 billion debt write-off promised by G7 countries in 1999 has been wiped, says Jubilee 2000. Under these circumstances, globalisation for most developing countries is a game watched from the sidelines. The winners live in the north.
The last major World Trade Organisation ministerial meeting two years ago in Seattle broke down amid a hail of rubber bullets and accusations that America and Europe refused to entertain developing countries' concerns. This week world Trade Ministers gather in Doha, Qatar, to pick up the pieces. Their aim is to launch a new round of talks at a time when America needs to keep the world onside as never before.
The US has to give poor countries, the majority of whom are Muslim, an economic leg-up if the delicate coalition to wage war against Afghanistan is not to implode. The markets are watching, too. US Federal Reserve chief Alan Greenspan last month said successful WTO talks were vital to kick-starting a contracting global economy. Last week, the UN's International Labour Organisation said 24 million jobs would be lost by the end of 2002.
These talks may be vital, but there is no guarantee they will go ahead in Doha, even at this late date. For one, there are security fears: the number of lobbyists travelling out, particularly from America, is dwindling. Even as Trade Ministers prepare to travel, splits and rows are escalating. The US is accused of adopting divide- and-rule tactics. Subtle US diplomatic arm-twisting offers compromise to some countries and threatens the withdrawal of aid to others, while hoping for opposition coalitions to split.
Sources in Geneva say that Bolivia and the Dominican Republic have been leaned on to agree with US demands on trade declarations or face reductions in aid. A number of African countries have been told that they will get cheap life-saving drugs if they wave through US liberalisation proposals.
Tempers are fraying. Last Wednesday, Indian trade minister Murasoli Maran threatened to leave the World Trade Organisation because, he argued, developing countries had no part in shaping the trade agenda.
The Least Developed Countries group met last week in Geneva and issued a statement that said none of their input was getting through to the Doha draft declaration. The Africans affirmed their opposition to new issues such as environmental, trade facilitation and competition issues being included.
Stuart Harbison, chairman of the WTO's General Council, upped the ante last week when he said the draft was final. Insiders say that the splits are worse now than before the Seattle talks.
European Commission insiders are trying to douse the flames by saying that India perennially threatens not to attend ministerial meetings and that the gulf between camps is narrowing. Yet the sticking points are many, and whatever the technicalities, trade treaties are a matter of life or death.
The most immediate concern is access to life-saving drugs. Drugs to counter TB, malaria and Aids are too expensive for poor countries because they are protected by 20-year patents under the Trade Relate Aspects of Intellectual Property Rights (Trips) treaty. Developing countries want Trips relaxed and clarified so they can import cheap generic drugs. But the UK, along with Germany and the US, opposes this.
Over the past year the EC has become more 'progressive' on this issue, but a liberal resolution from Europe has been blocked by UK and German trade officials desperate to protect their drug companies through what's known as the 133 Committee. Kevin Watkins, Oxfam's senior policy adviser, said: 'At the last Labour Party conference, Tony Blair said it was up to prosperous countries to create a framework to remove poverty from Africa. But what Britain is doing with regards to Trips is a crime.'
What developing countries want is fiscal reform, plus access to markets. A Swaziland sugar farmer may produce a cheaper crop than his European equivalent, but that doesn't mean he can sell to Europe. EC export subsidies ensure Swaziland can't compete with Europe. The result is African destitution.
America is under pressure to stop dumping subsidised cheap exports, usually of steel, on countries such as Mexico and India, whose indigenous industries can't compete.
The big prize for the EU and the US is the liberalisation of trade in services. This could allow private sector companies unfettered access to new transport and utility markets. Lobbying by US insurance groups and healthcare companies may ultimately open up education and health. The EU may be prepared to reduce agricultural subsidies if what's known as the General Agreement on Trade in Services Treaty is rubber-stamped.
Doha is all about trying to start a new round of trade talks. The last one, the Uruguay Round, took seven years and was completed in 1993. Developing countries say most of Uruguay's provisions have not been implemented and that a new round is premature.
This week could see a big bust-up or an anodyne statement introducing moves to kick-start a new trade round. But it will take a decade to complete. There will be no benefits to the global economy for some time.
There's more pre-Doha debate in our online globalisation special at www.observer.co.uk/global