Global Trends by Martin Khor
Monday 4 August 2008
The WTO talks in
After the collapse of the
World Trade Organisation’s mini-Ministerial talks in
They are still recovering from the shock of the breakdown of the talks that took place on 29 July after a roller-coaster experience of nine days.
Many delegates expressed regret at the failure. Malaysia’s representative to the WTO, Ambassador Muhamad Noor Yacob said he was disappointed because it meant an opportunity lost for reducing the developed countries’ agricultural subsidies, and also because Malaysia would have had more export opportunities if the tariffs were reduced.
Although some 40 Ministers
were invited to the talks, most of the negotiations were conducted by
only 7 Ministers (from the
Progress had been made on
a number of issues, but on several of the key issues the talks had been
stuck. A compromise draft by Lamy to the G7 had a fragile status, with
Meanwhile, frustration was building up among the 30 or more non-G7 Ministers who were specially invited by Lamy to the WTO, only to find themselves waiting for days in the wayside, while the G7 met.
When the end came, the
The SSM would allow them to raise tariffs above the bound rate if import prices of agricultural products fall below or the volume rises above certain levels.
The US Trade Representative
Susan Schwab tried to take the high ground by proclaiming that it was
preserving the past 30 years’ gains of the trading system from the protectionists
It was part of a concerted attempt by the US to shift the blame of any collapse onto India and China, by portraying them as selfishly seeking new protectionist devices. In fact a strong SSM had the support of about a hundred developing countries.
Insiders at the G7 meeting were surprised at the tenacity of Schwab in insisting on an unreasonably high trigger of 150% (of the base import volume) before the SSM could be allowed to raise duties above the bound levels prevailing now.
Lamy tried to break the SSM
deadlock by proposing a new draft, but this was rejected by the
Many Ministers and diplomats
are speculating that the SSM was not the real issue that was irreconciliable.
In the most widespread view, the
The 2008 US Farm Bill having planned that cotton subsidies be maintained or increased in the next five years, it would have been difficult or impossible for Schwab to offer a plus-70% cotton subsidy cut.
Without a good cut in subsidies,
The failure of the WTO talks
would then have been placed squarely on the
This suspicion that the US wanted to avoid the cotton embarrassment is the backdrop to the comments made by several Ministers of developing countries in their press conferences that SSM could not have been the real cause of the talks breaking down, but rather the scapegoat picked on by a major player in an attempt to shift the blame on to another issue and on other countries.
After all, despite Schwab’s
portrayal of the protectionist potential of the SSM, the
As the Indonesian Trade Minister Mari Pangestu, who led the fight for the SSM, put it: “It is like accusing us of a crime that we did not commit.”
As the dust settles, the
diplomats and secretariat officials remaining in
What will happen when the
WTO comes back from its August break? No one can tell at this moment.
The speculation is that some meetings will continue. But the spirit
is gone from the talks, because the
The expectation is that nothing
can happen until the new
It could be difficult for the WTO talks to re-start on the same basis as before, and they could just fade away. But the WTO and its on-off talks have been resilient in the past. Who knows, the off button may switch to “on” again one day.