WTO deal locks in world trade inequalities, reports Emad Mekay from Hong Kong High-profile world trade talks wrapped up in Honk Kong earlier this week with a modest deal that promises greater economic benefits for rich countries and scant offers for developing countries. The final text salvaged from around-the-clock negotiations set a deadline to end one kind of farm export subsidies by rich nations, known as export subsidiaries, a long-time demand by developing nations. But the deal binds poorer countries into further opening their markets to multinational corporations. Dozens of non-governmental organisations and anti- corporate globalisation campaigners attending the World Trade Organisation (WTO) talks, which closed Sunday, say the deal could in fact hamper the development of developing nations, threatening hundreds of millions of their workers and farmers, including those in the Middle East. "It is very clear that if this document is going to determine the future course of the WTO, the majority of people in the world would be worse off," said Lori Wallach of the US-based Public Citizen's Global Trade Watch. The final text sets 2013 as the deadline for dismantling controversial multi-billion-dollar export subsidies given by the European Union and countries like the United States every year. However, a number of economic rights groups challenged the final text of the meeting and criticised the focus on the EU's offer to commit to the 2013 deadline. The international environmental group Greenpeace described the much trumpeted EU export subsidies deadline as "only a symbolic gesture, creating the illusion that the developed countries have given something in return for the concessions they have extracted from the developing countries." Watchdog organisations say the impact of the new deadline will be minimal since the meeting failed to commit the United States, Japan or the European Union into ending their generous domestic farm support, which runs into billions of dollars annually. These subsidies disadvantage local farmers in Africa, the Caribbean, Latin America and Asia by forcing commodity prices down. This watered-down text leaves out the most important issues for the WTO to address -- agricultural dumping, creating employment, and promoting development," said Sophia Murphy of the US-based Institute for Agriculture and Trade Policy. The United States successfully resisted slashing its domestic support to cotton producers, a setback for Brazil and four West African cotton exporters which had hoped the meetings here would commit the United States, the world's largest producer and exporter of cotton, to eliminate several aspects of its support programme. The text does allow for a cut in export subsidies, the lesser form of cotton support, by 2006. On industrial goods, the document proposes to cut tariffs using the so-called Swiss formula, one of the most radical ways to reduce tariffs. Anti-poverty activists say this will open fragile industries in developing countries to unfair competition from powerful multinationals. "Such steep cuts will have a disastrous impact on developing countries' ability to build up an industrial base and to protect their natural resource base," said Murphy. The text also obliges developing nations to hold sweeping negotiations to further open their markets in services like banking, insurance and utilities, which could signal another wave of privatisation and deregulation like that championed by international financial institutions such as the World Bank and the International Monetary Fund in Egypt in the early 1990s. Some business representatives here, the real force behind many of the positions of rich nations, said they are satisfied with maintaining the option of greater market shares in the South but complained that the text of the deal does not offer specific deadlines for when developing nations must open their markets. A coalition of services companies from developed nations and from India, which stand to gain in services like information technology, banking, legal services and telecommunications, said the text was "watered-down" and "fails to push more countries towards a concrete series of timetables for reform". The overall result still snatched the talks from the throes of failure, considering the WTO's 149 member nations have long been deadlocked over a number of key issues. "In a week of disappointments, this is no small prize," said EU Trade Commissioner Peter Mandelson. "It is not enough to make this meeting a true success. But it is enough to save it from failure." The outcome also sets the tone for global trade for many years to come. "This ministerial was obviously a prerequisite for moving forward with robust multilateral agreements," said Deputy US Trade Representative Susan Schwab. "This is a negotiation that is not over. We have laid the platform for what we anticipate to be highly successful negotiations with successes in other areas -- in market access, in agriculture in services and in manufactured goods," she added. The long-term impact of the deal also resuscitated concerns that had subsided after the collapse of similar trade talks in Cancun, Mexico in 2003 -- namely, that inequities in the current global trade architecture will become even more stark. "This is a profoundly disappointing text and a betrayal of development promises," said Phil Bloomer of Oxfam International. "Rich countries interests have prevailed yet again and poor countries have had to fight a rearguard action simply to keep some of their issues on the table." The reluctance of developing countries to sign onto the deal, however, reinforces the view that the notion of free trade may be falling out of favour in some quarters. A series of recent economic studies, including a recent report from the World Bank, have downgraded the much promoted benefits of greater liberalisation. The consensus is that the balance of benefits will likely go only to the 30 or so developed countries rather than to the approximately 120 others from the developing world. "The message from poor countries is clear," said Carin Smaller, trade analyst at IATP. "This is not the development round they asked for. The voices of the large number of people around the world have been seriously marginalised and their demands sidelined."
