It’s a blame game. Everyone at the WTO trade talks seemed to want to look for someone to blame for yesterday’s collapse, and more often than not, it was the US that was held out as the bogey man of the day. Some say it will be years before trade talks resume, others say it’s the end of globalisation, and that the days of global economic growth are over. And yet, cut through the recriminations, and some undeniable truths to stand out.
The Doha round of trade talks was kicked off after September 11 2001. The idea was to include everyone, to make all countries a part of the negotiations, so that no one felt left out. They were supposed to continue the good work done at the Uruguay round of the trade talks, which is credited by some as being an underlying reason behind the growth in world trade and has been a major factor behind the gradual inclusion of India and China in the economic top flight.
And yet it is farmers in America, Japan and Europe who seem to stand in the way of progress. Why is it that agriculture in Japan, the EU and US is relatively unimportant in economic terms, and yet continuously thwarts progress in trade negotiations?
This time the US was getting the rap because it was unwilling to cut agriculture subsidies without other countries slashing tariffs. Last year the US forked out $18 billion in agriculture subsidies, and the world’s agriculture based economies say these subsidies are unfair and make it impossible for them to compete.
But the US sees it differently. Its trade representative Susan Schwab said after the collapse of the talks: “…as we went through the layers of loopholes . . . we discovered that a couple of our trading partners were more interested in loopholes than market access.” 15-love to the US.
The EU, however, sees it thus. The snag is, argues Trade Commissioner Peter Mandelson, the US wants dollar for dollar compensation. If it gives a dollar in subsidies, it expects the rest of the world to give a dollar in tariff reduction, and yet, the word’s richest nation argues Mandy should be willing to be more generous. He said “The US was unwilling to accept, or indeed to acknowledge, the flexibility being shown by others in the room and, as a result, felt unable to show any flexibility on the issue of farm subsidies.” He added ” Surely the richest and strongest nation in the world, with the highest standards of living, can afford to give as well as take.” Bravo, Mandy - it’s 15 all.
But then Schwab returned the EU’s volley with a smash of her own ” Their average tariff is twice as high as ours and their farm subsidies are more than three times what ours are,” she said.
The truth is however, that while the EU and US blame each other (don’t forget Japan has its farming tariffs and subsidies too) the poorer countries lose out.
In fact, some think that that it was already too late, that the talks had in any case moved too far in the direction the US and EU wanted. According to John Hilary, Director of Campaigns and Policy at War on Want, “The collapse of the trade talks is good news for the world’s poor. Any chance of a genuinely pro-poor outcome was lost long ago, and the deal on the table would have caused great damage to developing countries. The world now has an opportunity to build towards a fair set of rules for the international trading system, rather than the failed model promoted by the World Trade Organisation.”
But perhaps the biggest problem is this. It’s not that the US government is caught up in self interest, it’s that the US public don’t care. While the collapse of the US trade talks made the headlines in most quality British newspapers and web sites, in the US, it received no, or little mention on any of the web sites we monitor.
If trade matters, then its important that the world’s top nations bend over backward to make it happen. And that means the public must put the pressure on. As long as the media in the world’s most powerful country remain colloquial in their coverage, the US will never have the public drive to break this deadlock.
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WTO collapse ‘good news for world’s poor’ War on Want
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