Global Policy Forum

The New WTO Framework Deal

August 3, 2004

In the early hours of August 1, 2004, WTO member countries approved a framework deal to keep the so-called "Doha Development Round" alive. The agreement has been hailed as an "historic breakthrough" and a major step forward in the fight against agricultural subsidies.

In reality, the deal is far from "development friendly," a fact that should be obvious given the US and EU's readiness to endorse it. These two major culprits may have pulled a fast one. Their agriculture is subsidized to the tune of US$ 320 Billion, an amount developing countries can never hope to match. Did they really agree to reduce this significantly in a US election year?

Some developing countries may be encouraged by the cuts in farm support, but they have little but vague promises. The deal contains no time frames and no airtight commitments. The blue box has become such a loophole that some experts argue that the US and the EU might actually be able to increase their subsidies under the current agreement.

On cotton for example, where the poorest countries in the world must compete with billions of American dollars, the US trade negotiators got everything they wanted. West African producers agreed to move cotton into the agriculture negotiations in exchange for faster negotiations. However, the only difference in the final text is an acknowledgement that cotton is an important issue and a promise to set up a WTO sub-committee on cotton to review the situation.

For Canada, this July agreement is a disaster. Despite promising to defend the Canadian Wheat Board, Canada's Trade Minister gave up after a meek fight. State Trading Enterprises (STEs) like the CWB are clearly marked for elimination. While some "negotiations" remain, it is clear that this government's heart isn't in it. Although it has served Canadian farmers well and has been deemed consistent with WTO rules, the Canadian Wheat Board will eventually disappear because it is seen as government interference in the "free" market.

On services, Annex C reaffirms prior language for members who "…shall aim to achieve progressively higher levels of liberalization with no a priori exclusion of any service sector or mode of supply." The threat to our public services, including health care, water and education, remains. This document therefore intensifies the pressure to achieve a substantive outcome.

All in all, the WTO framework agreement is not "historic" in its departure from its predecessors. It is an anti-development document steeped in the neoliberal ideal of unfettered market capitalism enabled by weakened and weakening states.

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