WTO – a missed opportunity for the poor


Trade talks at the World Trade Organisation’s headquarters in Geneva are at an impasse only a few days ahead of the 9th Ministerial Conference in Bali, the organisation’s bi-annual high-level meeting which gives the WTO general directions for its work.

Major media from around the world have portrayed the impasse as a missed opportunity for the world’s poor and a victory for bureaucracy and corruption. It has also been blamed on the stubbornness of developing country elites.

On the negotiation table lies an extensively bracketed text about a future Agreement on Agriculture (AoA), which comprises close to nine per cent of global merchandise, and a supposedly one-trillion dollars deal on Trade Facilitation (TFA).

Trade Facilitation intends to cut down on red tape and modernise import/export handling at the border.

The deal is negotiated to be binding and enforceable with sanctions, and may include some extended time of implementation for developing countries.

Some reports show that the expected gains for the world economy would be US$1 trillion, while other well-reputed resources put the figure at a much-lower US$68 billion.

But no matter how much (and where) the gains are, the WTO has not disclosed or conducted a cost-assessment.

You can’t have state-of-the-art technology and trained staff in your ports, if you have an 80 per cent informality rate – it doesn’t simply match your development level.

Developed countries have shown excessive zeal in promoting standards convergence of customs processing capacity at a multilateral level, as they do with intellectual property rights’ protection and investment protection in regional trade agreements.

At the same time, developed countries are reluctant to accept a proposal tabled by the G33 grouping of developing countries that would enable them to maintain their food security programmes.

These programmes, which are currently in place and running, purchase food from mostly poor farmers for stockholding and food distribution.

Now here is the deal: the advanced countries will agree to abstain from challenging these programmes in the WTO dispute settlement (‘peace clause’) during the next four years, if the developing countries agree to a permanent and binding Trade Facilitation Agreement, without any guarantee that a permanent solution will be found in four years’ time.

The prospect of an Agreement on Development that would encompass special and differential treatment for developing countries and a duty-free quota-free pass for all products that originate in Least Developed Countries (LDCs) are meager and no substantial progress is expected on this front.

Nevertheless, the Doha Development Round is named after a developmental mandate that still hasn’t been delivered after 12 years of negotiations.

Further, developed countries have pushed fiercely for the expansion of the WTO plurilateral agreement on information technology goods (ITA).

ITAs comprise close to 10 per cent of global merchandise, as well as many of the global value chains, especially and signing up to the agreement would severely reduce the development of IT industries in developing countries.

Concurrently there is a largely undetected process that will expand the Government Procurement Agreement (GPA).

Other negotiations taking place are related to the Trade in Services Agreement (TiSA), the conclusion of which will have a significant impact on the structures of the global economy.

Moreover, a plurilateral agreement to liberalise trade in environmental goods (and possibly environmental services) may surface next year and bilateral trade agreements and regional processes will continue to mushroom.

WTO members should reach an agreement, not only to prove that they can all work together and are committed to multilateralism, but also to correct the flaws that are largely responsible for today’s increasing inequalities.

The world’s poor need a permanent solution on the basis of the G33 proposal which would allow them to profit not only as food consumers but also as producers.

Members should also deliver to a private sector that wants trade facilitation, but on a non-binding basis, so that countries with limited capacities are not forced to deliver miracles or face the WTO court.

The TFA needs to be balanced in promoting import and export facilitation and provide for capacity building and resources if developing countries decide to join.

Bilateral and regional agreements risk dividing world trade along geopolitical lines.

In light of this reality, WTO needs to maintain its status as the global rules-maker on trade, and in order to achieve this, WTO members need to re-orientate negotiations to satisfy the developmental mandate of the Doha Round.

Simply put, they need to make trade work for all its members. The current negotiations are far from doing that.