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Commentary: Doha's Last Stand

This week's summit in Geneva will be the last opportunity the World Trade Organization has to salvage the Doha round of trade talks after their spectacular collapse in Mexico last year.

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WTO headquarters in Geneva

The World Trade Organization is seeking to bring movement to the deadlocked Doha trade round at a special two-day crisis meeting in Geneva that opens on Tuesday. WTO General Director Panitchpakdi Supachai confirmed last week that all parties have pledged to agree to a skeleton accord by the end of the week.

The foundation is a draft produced by Supachai that would demand the elimination of contested export subsidies for farm products. The paper also calls for widespread and worldwide liberalization of goods traffic and services. The fight over agricultural subsidies in rich industrial countries, which total about $300 billion a year led to the collapse of talks in Cancun, Mexico, last September. Ever since, talks have been placed on the back burner.

Few thrilled by compromise

But on Tuesday, a last attempt will be made by WTO's 147 member states to reach a deal, thus completing the work they were unable to finish in Cancun 10 months ago. If broad enough support can be found, the goal this week is to reach a deal that will lay out a timeframe and the foundations for negotiations of a new world trade accord. Whether sufficient support can be found is far from certain -- the compromise proposal placed on the table last week by Supachai was met with little enthusiasm.

For some, the proposal goes too far, and for others it doesn't go far enough. If an agreement can't be found in the coming days, the negotiations will likely cease, and no one knows if it will be possible to resuscitate them in the future. Opponents of globalization would most certainly celebrate another collapse of the trade round. In their eyes, the WTO is a rogue body in the global economy. Nevertheless, a breakdown of the talks wouldn't stop the process of globalization, it would just slow it down.

The consequences of a weakened WTO

The immediate consequence of a collapse would be a weakening of the WTO. The member states would stay on board and the treaties would remain in effect, but that's not enough to ensure the WTO's long-term authority. And such authority is necessary for the mediation of trade disputes. Without the WTO, these problems would again fall into the hands of diplomats, and that would put smaller countries at an even greater disadvantage. Nor would the superpowers of the world economy benefit. Without the mediation of the Geneva-based WTO, trade disputes between the European Union, the United States, Japan and, eventually, China, would escalate more frequently and could spin out of control far more easily.

A breakdown could also have immediate consequences for growth and the global economy. But there's a huge disparity of opinions when it comes to measuring the impact a general liberalization would have. The World Bank has estimated it would generate $350 billion in new wealth, with more than half of that going to the developing nations since they would have the most to gain from an opening of their markets.

However, the WTO is no development agency. It's an event that takes place within the confines of political reality. For the negotiators in Geneva, the challenge is to find a multilateral way out of the current labyrinth of conflicting political interests by the end of the week.

DW recommends

  • Date 26.07.2004
  • Author Tom Weingärtner (dsl)
  • Print Print this page
  • Permalink http://p.dw.com/p/5MEk
  • Date 26.07.2004
  • Author Tom Weingärtner (dsl)
  • Print Print this page
  • Permalink http://p.dw.com/p/5MEk