10. World Trade Organisation Update

Over the last 5 years, as well as campaigning for rules to hold companies accountable for there actions, SPEAK has been campaigning for changes in the rules that govern international trade so that they are rewritten in favour of the world’s poor and the environment.

Our campaigning has predominantly been focused on negotiations at the World Trade Organisation (WTO) but more recently many trade campaigners have also started to direct their attention towards bilateral trade agreements (deals made between two countries (or groups of countries)) that some of the worlds most powerful trading powers like the EU and the US are now starting to negotiate with some of the world’s poorest.

What’s Happening At The World Trade Organisation?

Since November 2001 the 150 or so members of the World Trade Organisation have been holding discussions to try to reach an agreement on the latest round of trade negotiations, dubbed the Doha Development Round, after the location of it launch in Doha, Qatar.

Suspension Of The Doha Round

However all negotiations were suspended by WTO Director General, Pascal Lamy in July 2006 as it became clear that it was looking impossible to reach an agreements in time to work out all the legal and technical requirements ahead of the deadline to complete the round at the end of the year.

The Doha Round was launched soon after the events of September 11th when world leaders agreed that it was vital that launch an ambitious round of negotiation, which would focus on the needs of the worlds poorest at its core. There was talk about plans to reduce the damaging level of subsidies that rich countries give to their farmers and increased access for goods from developing countries into developed countries markets.

However from the round inception the rhetoric of world leaders has rarely been converted into action. Powerful trading blocs like the EU and US have continually to aggressively demand further access to developing country markets but in return have refused to make any significant changes to their own agricultural subsidies.

The suspension of the round in July 2006 was largely due to the refusal of the US and the EU to make meaningful concessions on agricultural subsidies while expecting developing countries, in particular India and Brazil, to open up their service and industrial sectors. Developing countries have continued to rightly maintain that they shouldn’t be expected to accept policies that could have a negative effect on their development. The greed and selfishness of the EU and US is in a large part to blame for the impact

The Slow Walk To Suspension

From the launch of the round back in 2001, getting the 145 or so countries that make up the WTO to reach agreement has always been challenging. The WTO was set up as a multilateral system where each member has an equal vote, however in reality who holds the power is very different, trading blocs like the US and EU are able to use their economic might to bully poorer countries.

In Cancun, Mexico in 2003 the ministerial meeting collapsed without agreement as over 60 developing countries walked out after the US and EU attempt to start discussion on the so called new issues (investment, government procurement and competition policy) despite the concern of many developing countries that they wouldn’t be beneficial for development.

At the most recent ministerial in Hong Kong in December 2005, the small advance that developing countries were able to achieve on agricultural subsides were much smaller than the advances made by the US and EU on issues like industrial goods and services.

The behaviour of rich countries at previous ministerial meetings and their refusal to consider the real concerns of developing countries that had been promised a ‘development’ round from the outset meant that in a way suspension came as no surprise.

What Next For The WTO?

It’s possible that negotiations will be restarted in the first few months of 2007. A crucial deadline is the end of the trade waiver given to the president of the US by the US congress. This waiver, due to run out during July 2007, means that US politicians are only able to vote to support or reject a deal agreed, once it runs out it’s impossible to see how a deal would be approved by US politicians.

If negotiations do restart it’s hard to see how this is likely to be good for the poor, instead what could happen is that the EU and US will make some further, small reductions in their agricultural subsidies but pressure developing countries to accept further market opening in order to ensure that the round doesn’t collapse.

Whatever happens over the next few months, it won’t mean the end of the WTO, but it’s likely to lead to numerous discussions about the role of the WTO. Many believe that a multilateral trading system is still crucial to bring about trade justice, but for this to happen the WTO needs to changed to an organisation that has the interests of the poor and environment at it’s heart instead of an institutions that currently exists.

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