Global Policy Forum

WTO Fails the Poorest – Again

The World Trade Organization (WTO) has had difficulty setting a development agenda and delivering aid packages to poor countries at recent Doha trade talks. In this article, Ruth Bergan of the Trade Justice Movement argues that a “serious and democratic debate on the purpose and powers of the WTO is long overdue.” Rich countries do not want to give way to emerging economies and often circumvent WTO rules by engaging in bilateral talks to create deals, severely hampering the progress of developing nations. Bergan believes that developed countries have a steadfast adherence to free trade policies and find it beneficial to ignores social issues such as climate change and food security. The WTO must view trade “not as a goal in itself but as a means to achieving broader social, environmental and development goals”, by demanding accountability and responsibility from rich nations and increasing consultations with civil society, says Bergan. 

By Ruth Bergan

July 29, 2011

Trade ministers have long insisted that the World Trade Organisaton (WTO) Doha negotiations are a vital part of the response to the global emergencies in the economy, food, climate and employment. Yet we learned this week that a lack of political will has rendered the WTO incapable of agreeing even a minimal package for the least developed countries.

It became clear in late April – the 10th year of negotiations – that WTO members would not manage to agree a full Doha deal. In May the director general, Pascal Lamy, announced a proposed "early harvest" package comprising four measures aimed at benefitting least developed countries. No sooner was the proposal announced than the most powerful countries began to resist, with the US in particular demanding benefits to its own economy in return for any concessions to developing countries. This is in part symptomatic of developed countries' obsession with not giving too much to emerging economies like China, India and Brazil, an obsession that has been allowed to overshadow the development agenda. On Tuesday, Lamy was forced to announce that he had failed to reach any agreement on even this limited set of measures.

The measures on offer, including duty-free, quota-free access to developed country markets and improved rules of origin, did not come close to addressing the fundamental injustices in the global trading system. Poor countries are bullied into premature opening of their markets, undermining local producers, while rich countries flout the very rules they claim to uphold. The US, for example, rather than abide by the 2005 ruling that its cotton subsidies are against WTO rules, now pays Brazil not to implement countervailing measures. But the early harvest would have at least been a symbolic gesture towards the aims of the so-called Doha development round.

Doha has not honoured its commitment to make trade work for development. It failed to address the challenges that faced the world 10 years ago; it has failed to respond to the global economic crisis and important geopolitical changes. Given mounting evidence of overall losses, including serious damage to vital agricultural and industrial sectors, least developed countries have consistently raised concerns about the deal on the table. The continued failure to agree Doha has not stopped the rich and powerful seeking to shore up their own economies and trying to force developing countries into bilateral deals that go far beyond the plans for Doha.

The disastrous impacts of unfettered liberalisation on the global financial and food systems are plain to see. Yet apologists for the current so-called free trade system continue to push for deep and fast liberalisation across the board and to laud the multilateral trading system as the answer to problems as wide-ranging as human rights abuses, climate change and food security.

It is time that trade was put firmly in its place, so that it is viewed not as a goal in itself but as a means to achieving broader social, environmental and development goals. At the very least, the world's richest countries must honour their commitment to tackling their own damaging practices, particularly subsidies that drive down prices and increase poverty for farmers across the world. Multilateral trade negotiations need fundamental reform, to be based on fair negotiations, not power play, so that developing countries have an equal place at the table. Genuine consultation with civil society in both the global north and south would no doubt produce other proposals for improvement.

If agreement can't be reached on a small package of measures to help developing countries, as part of development agenda, then the relevance of the WTO and the multilateral trading system must be questioned. The Trade Justice Movement believes that serious and democratic debate on the purpose and powers of the WTO is long overdue. In Lamy's own words, we have clear evidence of "the inability of the WTO to adapt and adjust to emerging global trade priorities". New thinking and new institutions are needed to deal with the urgent global issues we face.


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