November 16, 2001
Finally, some genuinely good economic news generated by the horror of 11 September. The achievement might not sound earth-shattering: a deal secured in extremis at the World Trade Organisation meeting in Doha for the WTO's 142 members to launch a trade liberalisation round next year. But in today's fraught international environment it offers a precious moment of hope.
There is, of course, no guarantee that this immensely complicated bargaining process will quickly succeed. At the very least, however, the "stain of Seattle" – the angry and tear-gas shrouded collapse of the last attempt to launch global trade negotiations in 1999 – has been expunged. This has been done moreover by starting to level the trade playing field for the developing world, and thus addressing the most legitimate complaint of the anti-globalisation movement.
At the same time, the entry of China into the organisation will subject the great emerging commercial power of the new century to the rules and obligations of the global trade community.
The terrorist attacks have concentrated minds in two senses. In their desire to keep poorer countries behind their campaign to root out the al-Qa'ida network in Afghanistan and elsewhere, America, Britain and the other members of the rich world have made concessions they never might not otherwise have made. The rich world also knew that a repeat of the Seattle debacle would have further soured the world economic climate at the worst possible moment, perhaps turning what might yet be a relatively short recession into a deep global downturn.
So unusual compromises have blossomed in the Arabian desert. The European Union has given significant ground on farm subsidies, while Washington has made an important gesture on steel imports. Most welcome of all perhaps, both have agreed that poorer countries facing major public health crises should be able to override patents for expensive Western drugs.
No one should minimise the obstacles ahead. Theoretically, the WTO is supposed to finalise the new round in three years. But judging by this week's brinkmanship, complete with the sort of all-night negotiating sessions which have been the bane of the EU's existence, the process might take a decade, as a myriad of competing national and regional interests are juggled.
It suffices to pick out three of those obstacles. An increasingly assertive India, which in Doha was chief spokesman for the cause of the developing countries', created much trouble on its own account by delaying the start of talks to liberalise foreign investment.
EU negotiators, meanwhile, are returning home to face the ire of the continent's farmers' lobby – above all in France where Presidential elections loom next spring. And by agreeing to the renegotiation of America's anti-dumping laws, trade envoy Robert Zoellick has upset the domestic steel and motor industries and their powerful allies on Capitol Hill. Thus, a new trade round may die a slow death by Congressional nitpicking.
But these risks must be taken. The prize which awaits is potentially huge: improved access for poorer countries to the markets of the rich, and, according to the World Bank, the addition of £35bn to global wealth, more than half of which will accrue to the developing world. Trade liberalisation, equitably managed, offers the best hope of prosperity in a troubled world. There must be no turning back now.
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