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Deep divisions overshadow WTO talks in Nairobi

A rift between industrialized and emerging economies on how to liberalize global trade is set to dominate a World Trade Organization meeting in Nairobi, with some urging the WTO to abandon talks and start fresh.

Starting in Nairobi on Friday, the four-day ministerial meeting is intended to unblock the Doha round of talks on free trade and development that was started in 2001.

But on the eve of the conference in Kenya's capital, US Trade Representative Michael Froman warned that the talks aimed at lowering global barriers to trade had little prospect of success.

"It is time for the world to free itself from the strictures of Doha," he wrote in an opinion piece published in the British business daily Financial Times on Friday.

The Nairobi meeting comes two years after ministers from WTO member countries reached a landmark deal in Bali on overhauling global customs procedures - the first multilateral agreement concluded by the WTO since its inception in 1995.

But there are few signs that countries will be able build on the momentum gained in Bali to carve out even a limited deal in Kenya.

Elusive global deal

Negotiators will mainly focus on a deal regarding agriculture export competition and trade development in the world's poorest nations.

Schweiz Welthandelsorganisation WTO Hauptquartier in Genf

Intense preparations for the meeting that have been underway at the WTO headquarters in Geneva have made little headway.

But EU Trade Commissioner Cecilia Malmstrom warned the European parliament last week that "prospects for even this more limited package are very uncertain, even gloomy."

"Developments in Geneva, have dramatically deteriorated in recent days, all but confirming that we are facing a very difficult Ministerial Conference in Nairobi," she said.

The 162 countries which make up the WTO set trade rules among themselves in an attempt to ensure a level playing field and spur growth by opening markets and removing trade barriers, including subsidies, excessive taxes and regulations. But lacking progress has led countries to increasingly pursue bilateral or multilateral trade deals, casting a dark cloud over the relevance of the WTO.

According to Malmstrom, the conference was "vital" for the future of the WTO, and failure to reach agreement could prove "very dangerous for the whole multilateral system."

Rich-poor divide

The trade talks that began in Doha have been riven by a rift between rich and poor WTO member states. They never recovered from a collapse in negotiations in Geneva in 2008, which was caused by a dispute over a provision that allows developing countries to erect protective import tariffs on farm goods.

Afrika Mali Kleinbauern Landwirtschaft Anbau Gemüse

Many of the world's poorest nations in Africa and elsewhere have come to realize that they need to continue to protect their farmers, most of whom are subsistence-level smallholders.

However, many of the world's poorest nations, notably from Africa, continue to insist on special safeguards to protect their agricultural sectors.

Liberian President Ellen Johnson Sirleaf, for example, told the news agency Reuters in an interview ahead of the meeting that many of the developing countries, including Liberia, believed "it is time to support agriculture."

Sirleaf also said African countries must continue to push for reducing subsidies by wealthy countries for cotton production and other areas of farming. Such support made it impossible for developing nations to compete, she said, adding: "We hope - I'm not sure that I can say with confidence it will happen - that the reduction in subsides for farmers in developed countries will take place."

Developed or developing?

But observers say it would be politically impossible for most Western countries to make those concessions, which are hugely popular in the nations that have them.

In Nairobi, there's also bound to be a controversy over which countries actually qualify for concessions under a WTO list of developing countries. Some WTO members are calling for a revision of the list, questioning special treatment for countries such as China and Brazil.

US Trade Representative Michael Froman lamented that some emerging markets have today become the biggest providers of agricultural subsidies, but are still allowed to circumvent the rules.

"If you are a poor farmer facing a global market distortion it does not matter where the subsidies causing it came from. Artificial distinctions between developed and emerging economies make no economic sense," Froman wrote.

uhe/pad (Reuters, AFP, dpa)

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