It's Doha déjà vu (all over again)

December 21, 2008

     By Duncan Green     

Back in April, I spoke at a workshop on the WTO’s Doha round of trade negotiations where the EU negotiator Peter Mandelson got a laugh by saying ‘we have six weeks to get a deal… and I really mean it this time.’ Three months on, Mandelson will doubtless really mean it again, along with about three dozen other trade ministers who will be in Geneva trying to reach a breakthrough on talks. After so many years drinking in the ‘last chance saloon’ beloved of their spin doctors, their livers must be a mess.

For those with an appetite for detail (and the WTO really does detail), you can get daily updates on this week’s talks from the excellent Bridges news team at the ICTSD thinktank in Geneva. I’ve signed up because I won’t be in Geneva this week – I’ve done my time, attending the 1999 ‘battle of Seattle’, getting excited at the promises (long since broken) of a ‘development round’ in Doha in 2001, and going to all the ministerials since (always as a sensibilist NGO delegate in a suit, mind you). I suspect I could probably write a lot of this week’s declarations and press releases already…..

Oxfam is publishing a paper today on the US and EU’s addiction to agricultural subsidies, timed to coincide with the start of the talks. These subsidies are one of the most notorious aspects of the trade negotiations, highlighting how adept the rich countries are at carving out exceptions and loopholes for themselves, while trying to pressure the developing countries to open up their markets. The shiny new US farm bill (a once every five years chance for agribusiness to enlarge the size of its government trough) will require particularly impressive displays of sophistry from US negotiators as, despite record high prices and incomes, the bill actually expanded the ceiling for government farm subsidies so that, if and when prices fall, government will pick up the slack (whatever happened to market disciplines, moral hazard etc etc?). Perhaps the most notorious example of the way subsidies lead to dumping on developing country markets, the US cotton sector, stands to pick up $1 billion annually over the next five years. The EU is no better. Congress also did little to sort out a food aid system that insists on dumping US produce on poor countries, even when doing so undermines local agriculture. For background on the iniquities of bad food aid, see here.

In exchange for these smoke-and-mirrors non-concessions, the subsidy superpowers are demanding big concessions from poor countries, prying open markets for their industries and investors. The point here is not that trade and foreign investment are necessarily a bad thing – indeed, they have played a vital role in a number of development successes in East Asia and elsewhere. It is that prematurely forcing liberalization on a country can actually set back its development. There is no short cut – effective states have to be in the driving seat, piloting their economies towards development, often through industrial upgrading. I go into all this in the trade section of From Poverty to Power.

What happens in Geneva this week really matters. WTO rules are effectively irreversible – a bad deal will remain in place for decades. And the WTO debates and rules set the tone for all those regional and bilateral trade and investment negotiations that cut ever more deeply into country’s development plans. So please take a deep breath and grapple with the torrent of platitudes, jargon and doublespeak that pours forth from Geneva this week.