Doha can still give world trade a boost

However, an informal meeting of trade ministers held in Paris last week to coincide with an Organisation for Economic Co-operation and Development summit, did provide the direction that had been missing to ambassadors at the World Trade Organisation in Geneva. The Europeans, in particular, showed leadership flexibility on aspects of the Common Agricultural Policy.

The WTO Council, representing ambassadors in Geneva following this meeting, was positive. Ambassadors did not just rehearse their old speeches. A willingness to address real issues is only possible when ministers give firm directions.

Everything always comes back to agriculture. At the launch of the Doha round, ministers agreed to the eventual elimination of export subsidies and to address issues such as market access for agriculture.

This was very difficult for many trade ministers. It's a battle that has raged for 50 years. The Uruguay round that returned billions of dollars to agricultural exporters represented by the Cairns Group resulted in export subsidies being cut by less than 25per cent. That is worrying stuff for all concerned.

The European Union's Commissioner for Trade, Pascal Lamy, and the US Trade Representative, Bob Zoellick, have shown real leadership and have agreed on an agenda that tackles issues that are politically difficult at home. This has given new life to the Doha round.

The round will not conclude this year as planned but it may conclude next year. (Insiders are predicting a successful conclusion in 2006.)

However, next year the US presidential authority to negotiate expires. It is possible that congressional approval could be extended but we don't know the composition of the new US Congress. That's another reason ministers knew they had to show some positive movement.

Agriculture is the toughest question but there are other difficult subjects. The Europeans and Japanese have been particularly keen on agreements on investment, transparency in government procurement, competition and trade facilitation. These have been very difficult for many developing countries to digest.

Again the EU and the Japanese have shown flexibility and now may well accept a less ambitious agenda focusing on trade facilitation and suspending negotiations on the other working subjects, possibly advancing them by studies, institution and capacity building.

For example, most developing countries don't have effective domestic competition legislation let alone feel confident or competent to conclude negotiations on a global scale. This flexibility is welcome.

Another positive development has been the creation of the G20, a group of developing countries with a common agenda. A cohesive group led by serious countries such as Brazil, South Africa, China and India is useful as there is now a bloc to negotiate with.

The conclusion of a successful Doha round would lift the global economy by close to $US3 trillion ($4.33 trillion), helping 320 million people out of extreme poverty.
The poorest places on Earth would benefit the most.

If certain fishing subsidies - those that encourage overfishing and keep afloat fishing fleets that are not viable - were abolished, it would be the single biggest move towards sustainable fisheries in history.

A WTO deal can provide the momentum for countries to remove expensive and costly barriers to each other's growth without facing the political consequences of dealing directly with each other, which can be dangerous in places such as India and Pakistan. A deal can head off some of the more discriminatory practices that arise from bilateral and regional deals where the most powerful call the tune.

Remember the UN Millennium Conference of 100 world leaders in New York? Bold targets were agreed to - fighting Aids, alleviating poverty, and setting education and health goals for the poor. These ambitions would cost about $US60billion in additional aid. Big numbers. But that is only a third of what it is estimated that developing countries will gain from trade liberalisation. It's not a done deal.

On trade much can go wrong. The past few weeks have been the most positive for the WTO in the past two years. At last governments are giving life to what was agreed on in Doha.

Expect, however, new headlines about talks stalled, crisis in Geneva and ambassadors outraged. Governments need to be seen to be fighting to the last minute.

The big question is when is the last minute, 2005 or 2006?