Although the world’s developed and developing nations still appear to be far apart on concluding new agreements on international trade, they’ve at least agreed to make a new attempt to do so.
The so-called Doha round of trade talks hit a minefield at Cancun in 2003. Developing nations, notably China, India and Brazil, refused to go along with proposals to lift barriers in the agricultural sector unless farm subsidies in the developed nations were also curtailed. Any attempt to restructure the rules governing manufactured goods and services, which includes financial services and insurance, in exchange for an agreement agricultural products, likewise came to a standstill.
However, delegates from many countries involved in the stalled negotiations have gotten together at the high-profile meeting of the world’s economic movers and shakers in Davos, Switzerland. Representatives from the European Union, led by EU Trade Commissioner Peter Mandelson, the U.S. outgoing trade representative Robert Zoellick, and their counterparts from the G20 group of developing nations, have agreed to make a new effort to reach an accord.
The Doha round was originally scheduled to be concluded in 2004, but has been extended in the hopes that an agreement can be reached before the whole process collapses. A summit of the 148 World Trade Organization (WTO) members is scheduled to be held in Hong Kong in December, but preliminary agreements are a prerequisite to any successful outcome.
Speaking in an interview with the BBC from Davos, Supachai Panitchpakdi, the WTO’s director general, described the pace of WTO trade negotiations as “torturous, difficult and time-consuming.” He indicated, however, that he remains hopeful that some agreements can be reached as early as July, when the trade ministers of the main countries involved are scheduled to meet. WTO delegates are scheduled to begin new negotiations in Kenya in early March.
While the failure to agree on new trade liberalization measures has largely been characterized as a division between the “haves” (the developed countries) and the “have-nots” (the developing countries), it’s more complicated than that. India, China and Brazil all have flourishing manufacturing and service sectors, which they want to expand. They are concerned that any agreements that concentrate mostly on agricultural problems will fail to address their interests in these sectors.
Everyone concerned has now expressed a commitment to see progress in the Doha round, but the devil, as usual, remains in the details, which means more protracted negotiating. There is hope, however.
The BBC cited Brazil’s trade minister Luiz Fernando Furlan as indicating that negotiations were actually “going quite well” – at least compared to the so-called Uruguay round of trade talks, which took seven-and-a-half years to complete and established the current system of free trade and set up the WTO.
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