WTO negotiations collapse

In announcing the collapse of the negotiations, the WTO director-general Pascal Lamy argued that ‘out of a to-do list of 20 topics, 18 had seen positions converge but the gaps could not narrow on the 19th - the special safeguard mechanism for developing countries’. Agreement was thus very close. Nevertheless he told journalists ‘it is no use beating about the bush. This meeting has collapsed. Members have not been able to bridge their differences’. However, he argued that ‘failure does not mean the end of the Doha Round’, since ‘what is on the table represents twice or three times more than has been achieved in any previous multilateral trade negotiation’. With specific reference to the EU, Trade Commissioner Peter Mandelson elaborated on this with reference to agriculture, where the EU had offered ‘a 60% average cut in the EU’s farm tariffs’ and ‘an 80% cut to our trade-distorting subsidies’. He argued that this and other aspects of the emerging agreement would have ‘fundamentally reformed the way the rich world supports its farmers so that these policies no longer squeeze farmers in the developing world’ and ‘brought trade justice to the cotton trade and a solution to the banana wars’. It furthermore would have extended beyond the EU to others ‘the principle that the very poorest should pay nothing to export to those richer than them’.

While much attention has focussed on the SSM issue which triggered the collapse DG Lamy also highlighted a range of other areas where agreement was not reached (geographical indications, biodiversity, cotton, amongst others). Indeed, press reports suggest that US intransigence on the SSM issue may well have been designed to avoid having ‘a spotlight trained on its cotton subsidies’.

Meanwhile IATP representatives suggest that the dispute around the SSM issue was rooted in ‘an ideological divide’ between those members who believe ‘free markets will solve everything and a view that sometimes, protection mechanisms are necessary to stop disruptions to local markets and domestic farmers’. Representatives of the Carnegie Endowment for International Peace similarly noted that in times of low or volatile commodity prices ‘tariffs may be the only policy tool available to resource-constrained governments in low-income countries to assure poor farmers that they will not be wiped out and thus to encourage more planting and attract desperately needed agricultural investment’.

In terms of what happens next WTO DG Lamy suggested that many WTO members remained committed to negotiations and therefore the chairs of key negotiating committees would seek to produce papers ‘capturing the work done during the mini-Ministerial’. Indeed, press analysis suggests that the breakdown of the WTO talks around the agricultural safeguards issue was unexpected, but that there is some hope that talks could be resumed after the summer recess or in 2009 following the inauguration of a new US president.

There have even been suggestions that despite the collapse of the WTO talks, agreements could be salvaged in some areas, notably on environmental goods, export competition and duty-free, quota-free access for LDCs. However, larger developing countries have argued that this could result in a sub-optimal outcome for developing countries as a whole. Speaking in Delhi on August 12th 2009 DG Lamy argued that ‘too much had been achieved now to simply leave it aside’.

Meanwhile the convening of the mini-Ministerial in Geneva in July prompted the African ministerial spokesperson, Minister Kenyatta of Kenya to set out Africa’s demands in the agricultural sector. These included:

• a real and substantial reduction in trade-distorting domestic support;
• measures to address instability in commodity prices;
• measures to address import surges;
• a more ambitious outcome on cotton;
• a deal on bananas which ‘will not impact negatively on the African banana-exporting countries’;
• measures to address preference erosion;
• accommodation of African concerns over geographical indications.

Addressing the press the Kenyan minister argued that ‘most of the key issues of interest to the African continent were not even discussed’.

It is now felt that the collapse of the WTO talks could ‘encourage greater reliance on regional trade deals’.