NOTHING KEEPS HAPPENING IN GENEVA

It’s now a little over a month until Trade Ministers meet in Hong Kong with the hope of advancing the ambitious Doha Development Round. Unfortunately the timetable for concluding the round has not been met. The failure to get some progress and momentum for the round at Cancun in Mexico when that Ministerial Conference collapsed lost the global economy at least 2 years. Talks have not advanced in Geneva this week. This is not the end of the world, Ministerial meetings have failed to agree before. It shows how important the World Trade Organisation is to the world economy. These conferences are real, the decisions binding upon governments and where there are differences in interpretation of agreements, there is a binding disputes system to bring closure to these differences. That’s unique in the international architecture. Because these agreements must all be ratified by Parliaments and Congresses, Ministers must carry their Governments with them. Nowadays Ministers often have more difficulty negotiating with domestic interests than with their Ministerial counterparts.

WTO Ministerials are different, truthfully, nothing much comes out of international meetings of Ministers of Social Welfare, Labour or the Environment. That’s why it’s easy for them to meet, agree, fudge, go home unnoticed. This Hong Kong Ministerial meeting is vital if the benefits of the Doha Round are to be shared over the next few years. Several key Ministers met last Monday in London, nearly 30 assembled on Tuesday in Geneva. Reports are not good, reach for your gun when someone talks of lowering ambitions, increasing the timeline, widening the agenda. In Geneva it was called Moore’s Law - international institutions like the World Trade Organisation don’t fail, they just adjust their objectives to meet their non-results.

The world economy nor the global trading system can stand a rejection of multilateralism, the WTO or the Doha agenda. Leaders cannot afford to walk away from the ambitions of trade liberalisation agreed to when I was Director-General of the WTO at Doha. Alas, it seems they must now talk of lowering ambitions, redouble efforts, more space, etc., Oh dear. Let’s remind ourselves that a successful Doha Round will lift the global economy by $3 trillion, or more than adding another China to the world economy, lifting over 300 million people out of extreme poverty. These are big stakes, especially for the poorest nations on earth. President Kennedy, when he launched a trade round just a few decades ago, said a new round would lift all ships but that developing countries like Japan would benefit the most. How true! Case made. Why then is it so difficult to make progress? It’s never easy, no round has ever concluded on time.

Agricultural issues are a deal-maker or a deal-breaker. Unless there is progress here, the round will not conclude. Reform in agriculture will bring huge benefits to Latin America, Africa and other agricultural exporters. For Africa, this means the equivalent of increasing all overseas development aid by 500%. It’s interesting that it’s now the Group of 20 (G20) that demands free trade in agriculture, insisting that rich countries at last live up to the economic ideals their leaders so often speak so nobly of. The G20, lead by Brazil, India, China and South Africa, changes everything. The WTO is no longer a rich man’s club. In the old days the big guys could get together and pretty much win on most issues. Not now. Rich countries spend over a billion dollars a day to make their food dearer and reduce choice to their people because of their subsidies and protectionism. The United States and the European Union have offered the biggest cuts yet in their subsidies, but it’s not seen as enough by agricultural exporters. What’s the worst that can happen? Postponing the conference would be a dangerous precedent, do it once and it can be done again. The WTO rules state Ministerial meetings must be held every two years to hold the WTO accountable. France has already said Trade Commissioner Mandelson has gone too far in agriculture, the U.S. and G20 say not far enough. France is not alone in Europe and other countries will quietly support her. Alas, back on the agenda is “special” and sensitive products. That’s chilling for many agricultural exporters. If it’s about an extra few years to adjust, maybe, but if it’s a Trojan horse, then there will be no movement in Hong Kong. Unfortunately nothing keeps happening in Geneva. The loser, as always, will be the poor in rich countries, and the poor in poor countries.