Emad Mekay

WASHINGTON, Jul 25 2006 (IPS) — With the breakdown Monday of the World Trade Organisation’s multilateral talks in Geneva known as the Doha Round, anti-poverty and fair trade campaigners appear divided over the implications for developing nations.

Some critics of the WTO say the decision to suspend the talks indefinitely may be in the best interests of poor countries.

“This will be welcome news to millions of people around the world who feared that a WTO deal would have further impoverished the world’s poorest people and caused irreparable damage to the environment,” said Friends of the Earth International in a statement on Monday.

The group, which has fought the WTO talks, says that if more natural resources are traded internationally instead of being available for use locally – as certain countries and transnational corporations wish under the WTO – this could increase poverty for millions of people.

Others argue that the talks’ collapse may not benefit poor nations because they are already tied to a trade system that gives greater access to rich nations in developing country markets.

“Contrary to what some anti-globalisation advocates contend, developing countries have much to gain from an agreement promoting more free and fair trade,” said Antoine Bouet, an analyst with International Food Policy Research Institute (IFPRI) in Washington.

Bouet argues that a Doha Development Round that grants poor countries “full access to wealthy-country markets,” in which access for the so-called least developed countries to wealthy-country markets is increased from 97 percent of imports to 100 percent, and which enacts the lowest possible tariffs for “sensitive and special” agricultural products, would bring gains to poor nations.

The main hurdle that led to the breakdown of talks among trade diplomats from six key countries and blocs – the United States, the European Union, Japan, Brazil, India and Australia – was the agricultural subsidies that rich nations give to their large farm companies.

The EU criticised the United States for failing to propose dramatic cuts to its domestic agricultural support, while Washington accused the Europeans of lavishing more than twice as much money in subsidies on their own farmers while insisting on classifying some products as sensitive, meaning they enjoy greater European protections.

Washington also accused Brussels of rejecting greater market access in services and goods.

A WTO report released Monday said it was difficult to pin down how much each side actually gives in agricultural support because of discrepancies in reported figures from those that appear on their national accounts.

The report, however, said the EU domestic agriculture support from 1995 to 2001 has averaged 89 billion dollars a year, while the U.S. averaged 66.1 billion dollars during the same period. This does not include export subsidies or other forms of direct state aid, which would make the totals even higher.

“All rich countries promised was a repackaging of existing domestic support rather than real cuts to the amount of money going to rich farmers and corporations,” said Aftab Alam Khan of the fair trade group ActionAid.

This rigidity has led developing nations, under pressure to continue to open up their markets, to lose hope of securing a better deal in the important agriculture sector, some observers say.

“With the livelihood of two billion farmers around the world hanging in the balance, many of them living on less than one dollar a day, developing countries expected real improvements in agricultural trade rules,” said Raymond Offenheiser, president of Oxfam America.

“But rich countries have not demonstrated real flexibility on agriculture trade – demanding concessions from each other and poor countries, while protecting their own markets and their massive agricultural subsidies.”

Other analysts say that the injustice of the proposals goes well beyond agriculture into other areas, like services and manufactured goods.

“Extremist proposals on the table at the WTO expansion talks, such as a plan to impose new WTO disciplines limiting all countries’ domestic regulation of services, including healthcare, energy and more, have attracted new blocs of opposition to WTO expansion from state and local officials and national legislators in countries around the world,” said Lori Wallach, who directs the U.S-based Public Citizen’s Global Trade Watch.

Kimberly Elliott of the Centre for Global Development sees a loss for poor nations. She argues that the derailment of the Doha Round means that proposals put forward to lubricate multilateral talks and to help the poorest countries, such as aid for trade and duty-free access for the world’s poorest nations, will all now be frozen.

“The biggest losers would be the smallest and poorest developing countries,” she said.

“If the round is not revived, proposals to extend duty-free and quota-free treatment to most or all exports from least developed countries, as well as proposals to increase aid for trade, would also likely stall.”

Despite some differences, most civil society groups seem to agree that the breakdown of the talks serves as an opportunity for all parties to reassess the concept of free trade and the strategies by rich nations.

“Give them four more months, give them four more years, give them four more centuries – but unless the EU and the U.S. make fundamental changes to their offers, then these talks will fail development,” said Celine Charveriat, head of Oxfam’s Make Trade Fair campaign.

Wallach of Public Citizen takes a more pro-active approach and says the ball now is in the court of civil society groups and some governments who should take the initiative and work out the details of a whole new trade system.

“It will take a critical mass of countries willing to reject the more-of-the-same demands of the few special interests which benefit from the status quo to launch discussions about real alternatives to corporate-led globalisation,” she said.

“Governments and civil society around the world now have an extraordinary opportunity to create a multilateral trading system that could actually deliver benefits to the majority,” Wallach said.