WTO woes

On Monday, ministers will convene a week-long meeting in Geneva to discuss key decisions in the embattled Doha round of trade liberalisation talks. Over 30 countries are expected to attend, though some of their representatives may wonder why they did.

Started in 2001, the Doha trade round has repeatedly ground to a halt following disputes over agricultural tariffs (the target of agricultural producers from the developing world) and industrial goods and services (markets for which in the developing world are the target of Western producers).  Back in June when WTO Director-General Pascal Lamy called for the meeting, UK Prime Minister Gordon Brown referred to it as the “endgame” for the trade discussion, warning that a failure to reach agreement could deal a “potentially crippling blow” to the WTO.  However, with rising food prices and souring economic growth around the world, failure looks ever more likely.

At the same time US, Japanese and European agricultural interests hold considerable and lasting influence over trade policy. The implication for emerging market economies such as Brazil and India is all too clear: the developed world won’t budge, so neither should they. Lamy’s wager of a better than 50% chance that a deal on agriculture and industrial goods would be reached, gloomy at the time, may have been wishful thinking.