Much to the consternation of the developing nations, the Doha Development Agenda negotiations were suspended last week because of bickering among developed nations, writes Gamal Nkrumah It was, by any standards, a deplorable fiasco. Laying the ghost of intractable trade talks proved to be an unnecessarily difficult exercise. Officially known as the Doha Development Agenda, the global trade negotiations failed miserably to exorcise the demons of the past and make them go away. The scale of today's global trading crisis warrants more attention from world leaders than they got at the St Petersburg G-8 summit of the eight richest and most highly industrialised nations. But the writing was on the wall when the G-8 met on 17 July. The credibility of the World Trade Organisation (WTO) is in shambles. Basic issues of sustainable development among the Least Developed Countries (LDCs) are now at stake. The prevailing myth that the Doha Development Agenda looks squarely at issues of poverty and development is now exposed as a big lie. "We have missed a very important opportunity to show that multilateralism works," warned WTO Director General Pascal Lamy. "And let me be clear, there are no winners and losers in this assembly. Today there are only losers," Lamy lamented. Lamy formally suspended talks on a multilateral trade deal on 24 July, prompted by the United States' (US) resolution not to cut its farm subsidies, unless the European Union (EU) and emerging developing countries, such as Brazil, China and India, reduce tariffs on both their agricultural and industrial products. "If the political will really exists, there must be a way," Lamy said. "But it is not here today." An indefinite suspension of the trade talks was the worst possible conclusion. The point is that the suspension flies in the face of the spirit that has guided the global trading system. The WTO focus on subsidies that distort trade uncovered the serious failings of the global trading system. "In practical terms this means that all work in all negotiating groups should now be suspended and the same applies to the deadlines that the various groups were facing," Lamy noted. "We will certainly not conclude the round this year," he said. Be that as it may, the worst aspect is the suspension of the recent multilateral agreement granting duty-free, quota-free market access to the LDCs -- the world's poorest countries. "Trade liberalisation negotiations tend to take years. The key is that all parties involved communicate with one another effectively and make concerted efforts to progress with the negotiations," Li Zhongshou, a Chinese Ministry of Commerce spokesperson, was quoted as saying by Xinhua, the official Chinese news agency. What sealed the fate of the talks was the inability of the G-6 -- the US, EU, Australia, Japan, Brazil and India -- to agree on how far to cut farm subsidies and tariffs. The G-6, representing key trading groups, account collectively for three quarters of world trade. The US and the EU are the world's two largest trading blocs. Then there is Australia (representing the Cairns group of agricultural exporters); Japan (representing the G-10 group of net agricultural importers); and Brazil and India (representing the G-20 Developing Countries). The Least Developed Countries (LDCs) have increased their share in world trade, mainly because of commodity price increases. But the 50 LDCs' share of world trade is less than one per cent. World trade is an estimated $19 trillion. The LDCs' share is a minuscule $133 billion. The G-20 Developing Countries, which include Egypt, Indonesia, Mexico, Nigeria, Pakistan and Venezuela, have delegated the task of advancing the interests of the developing world to the G-4 bloc -- Brazil, China, India and South Africa. But they have little economic clout. Even relative giants, like Brazil and India, account together for a mere three per cent of world trade. Global trade is dominated by North America, Europe and Northeast Asia. Some 21 developed countries spent $250 billion on subsidies -- all countries spent $300 billion. The EU spends $134 billion farm subsidies, Japan $47 billion and the US $43 billion. The suspension of the trade talks marks a severe blow to the development prospects of three quarters of the WTO members, whose economies are poor and weak "and for which integration in international trade represents the best hope for growth and for improving their system of governance," Lamy explained. But it was the humanitarian relief organisations that have spearheaded the campaign to highlight the negative impact of the suspension of the WTO talks on the LDCs. According to Oxfam, "Developing Countries continue to struggle to ensure the survival of subsistence farmers and break into rch Northern markets". "Multilateral alternatives to the WTO exist. Now is the time for governments to explore them," said Daniel Mittler, trade and policy adviser to Greenpeace International. "At the WTO's Sixth Ministerial Conference in Hong Kong, held in December 2005, a highly contested Ministerial Declaration was pushed through at the insistence of the US and the EU. Now these same governments are trying to strong-arm weaker governments into opening up their markets to foreign trade, while they themselves make as few commitments as possible," read a Call to Action statement by Our World Is Not For Sale, an anti-corporate globalisation organisation. "By July 2006, the WTO wants all member states to agree to 'modalities' in order to set the stage for the final phase of negotiations, before the US's domestic 'fast track' trade negotiating authority expires in July 2007," the Our World Is Not For Sale statement concluded. Blame rests at the door of trans-Atlantic trade disputes and the US insistence on retaining a three per cent protection tariff against imports from the LDCs -- including textile importers such as Bangladesh and African cotton producers. The EU Trade Commissioner Peter Mandelson pointed an accusing finger at Washington. The US, in turn, blames Europe for the suspension of the trade talks. Mandelson pointed out that increasing the LDCs' exports because of quota-free and duty-free access to wealthy nations would have a more positive impact than "anything in the Doha agricultural negotiations". He said, however, that he was "profoundly disappointed" with the suspension of the trade talks. The Doha Development Agenda talks did not even move on to the third leg, or non-agricultural market access. The US, with its demands for cuts in tariff protection for farmers, is widely regarded as the main culprit, but the poor nations have borne the brunt of the negative impact of the suspension of the trade talks. "What [the Americans] are saying is that for every dollar that they drip out of their trade-distorting farm subsidies, they want to be given a dollar's worth of market access in developing countries' markets," Mandelson explained. Washington officials, in turn, angrily dismissed European complaints. The US is "fully committed to a multilateral trade system," declared US trade representative Susan Schwab. Will Washington relent? That may still happen.
