The Doha round of World Trade Organization negotiations was launched two months after the terrorist attacks of Sept. 11, 2001. It sought to find international support for the "Doha Development Agenda," an agreement that aims to lower trade barriers around the world.
As Tony Blair put it, the negotiations are meant to "create the conditions in which millions of people will have a chance to escape poverty." While the pursuit of such a lofty goal is commendable, the recent Hong Kong ministerial meetings leave much to be desired in terms of progress.
So far it seems that the greatest accomplishment of the Hong Kong negotiations was that they did not collapse. This is an improvement on the collapse of the Canc??n meeting in 2003, but a notable step away from the success of the Geneva and Paris conferences in 2004 and 2005.
An agreement was made to end export subsidies on farm goods by 2013, and developing nations were promised access to rich countries' markets for at least 97 percent of their goods.
In addition, the United States made vague promises to West Africa's cotton producers that it would reduce domestic cotton subsidies before 2013. However, no concrete progress was made on the issues that were supposed to be at the heart of the trade talks: cutting farm tariffs, freeing trade in industrial goods and opening service markets.
A new deadline was set at the end of April for making progress on these important issues. But how is this progress? It rather appears to be a ploy for the developed world to further delay decisions on issues it has long avoided.
The truth is that the Hong Kong ministerial meetings did little to promote free trade. Most of the promises made were repetitions of previous agreements already in place or already accepted by the majority.
World Trade Organization members have long pledged to end agricultural export subsidies, but they have never set a date. The problem, of course, is not farm subsidies themselves, but the tariffs that are added to exports. Furthermore, the global impact of farm subsidy agreements would be relatively minor when compared with other trade opportunities.
According to the World Bank, the abolition of farm subsidies would only yield two percent of the theoretical gains which could be created if free agricultural trade could be agreed upon. Cutting tariffs, however, would yield more than 90 percent of the theoretical gains which could be gained by free trade.
In addition, pledging to end agricultural tariffs by 2013 is not a very big commitment. By then, the European Union, which is the world's biggest user of farm subsidies ($3.4 billion a year), will already have drastically reduced these subsidies as part of the reform of its Common Agricultural Policy (CAP).
Furthermore, a reduction of farm subsidies will not have an immediately beneficial impact on the developing world. Many poor countries are net importers of food: If subsidies are removed, world food prices will rise, helping farmers but harming consumers in the developing world.
The Hong Kong ministerial meetings ended with grand promises. However, it is unclear what will actually come of them, especially when the developing world is free to make exceptions to the agreed-upon rules.
The United States, for example, has allowed itself room to exclude some products such as sugar and textiles from its duty-free/quota-free pledge. Japan will also be able to exclude rice and leather. In other words, both the US and Japan have refused to make politically difficult but necessary decisions because of domestic opposition.
Japan, the US and the European Union have also promised to increase financial aid for the developing world. Japan pledged to increase its foreign aid by $10 billion, while the US pledged to double its commitment to $2.7 billion by 2010. However, both the ultimate form and uses of this aid money are still unclear. This means that, as with the promised subsidy and tariff reductions, it will be easy for the developing world to ignore its promises.
The main problem in the Doha talks is that no side, developed or developing, is willing to take the initiative to propose a solution. The U.S. and the big developing countries see Europe's proposed cuts in farm tariffs as inadequate. Brazil, India and others refuse to reduce their own industrial tariffs until more progress is made on agricultural trade. The European Union refuses to make any more concessions on its agricultural policy until developing economies increase access to their markets for industrial goods and services.
One would think that the urgency of the financial and social situation of the world's poorest nations would be enough to warrant action, but apparently it does not. All at the table are afraid of committing to what would be the best strategy because they are afraid others will not follow suit. This is just plain cowardice. Someone must take the first step. The costs of not doing so are too high.
