National Sections of the L5I:

WTO Doha trade round fails to reach agreement

Printer-friendly versionPDF version

Ministers fail to agree a new trade agreement at Doha, Qatar.

World Trade Organisation delegations assemble in Qatar 9-13 November, complete with gas masks and tight security. The delegates are fearful of attack, not this time from the anti-capitalist movement, as in Seattle two years ago, but from "terrorists" who oppose the US-led coalition's war against Afghanistan.

The mood music in the run up to the meeting is sombre, and not only because they fear for their safety. WTO officials are desperate for the Qatar meeting to launch a new trade round and they are struggling to find common ground among the 142 member countries.

The big corporations and the G7 governments want the WTO to adopt rules on government procurement, food and water, energy distribution, social services, education, health and safety, genetically modified organisms and environmental sustainability.

In all of these areas, they seek rules which will compel governments to admit private capital into these spheres. Before September 11, the prospects of successfully launching a new trade round at Qatar looked grim because the group of Third World countries that walked away from an agreement in Seattle still have the same concerns now.

Their first complaint is that, while they have lowered their barriers to trade to the big MNCs of the North, many of the agreements of the last round of negotiations (Uruguay Round, 1986-94) that would have benefited the South have still be to implemented. In particular, this includes opening up the EU, Japan and US markets to the imports of the South, especially clothing.

One big issue for them is the elimination of the huge and growing agricultural subsidies that USA, EU and Japan give their farmers which allows them to send their exports to the Third World cheaply.
There is a misconception that subsidies exist to keep poor farmers in business both in the North and South. It is a myth.

Subsidies are grants to the biggest agribusiness multinationals to help them sell their exports on the rest of the world's markets and knock out of existence the small farmers in both the Third World and the richer countries.

In 1999, the OECD estimated subsidies to be $306bn, up 5.6% over 1998. The US, EU and Japan were responsible for 89% of these.

In the UK, 80% of agricultural subsidies are taken by the largest 20% of farmers. Taxpayers subsidise the biggest 10% of US farmers by more than $13bn a year. The US think-tank Food First says:
"It is a transfer of money to large multinational corporate farmers who dominate world trade. They buy the grain, or whatever, at giveaway prices and use the subsidies to capture markets around the world and drive farmers out of business."

In the EU, in 1999, 200,000 farmers left the land. In the 1980s, in the USA, 235,000 farms closed. Those who benefit are the big MNCs who grab the lion's share of the $300bn a year trade in agriculture - double what it was in 1980.

Ten companies dominate the market for seed, fertilisers, pesticides and shipping. They control 60% of the international food chain.

Yet, while the US refuses to eliminate or reduce its subsidies for its own farmers' exports, it attacks the Third World exporters with a barrage of "anti-dumping" complaints.

Developing countries are also angered that the US has refused to back a formal statement that WTO rules protecting patents can be overridden where a country faces a national health emergency, such as AIDS.

They accuse Washington of double standards, after the US threatened to break the patent of the company producing the main anti-anthrax drug, in order to force it to reduce the price.

But it is not just the South versus North conflict that threatens the launch of a new trade round. The EU insists that issues like environmental protection are placed on the agenda but this is strongly resisted by the USA and others who see in this a European plan to their own farmers.

The Bush administration has tried to take advantage of the attacks on the World Trade Centre to push through the idea that the "war against terrorism" has to include knitting the world's nations together more tightly by breaking down the remaining barriers to "free trade".

In addition, September 11 had a big impact on investment, stock markets and consumer confidence, helping to quicken the slide into world recession. The idea gained ground that the world economy badly needed the new boost of several hundred billion dollars that the successful launch of a new round of trade liberalisation could bring.

But, late last month, a key meeting of World Trade Organisation delegates failed to agree a draft agenda. A number of Third World countries refused to bend to US pressure and agree a draft agenda a mere two weeks before Qatar opens.

Navigation