[Marxism] WTO Talks Collapse: US Fails to Bulldoze

Ruthless Critic of All that Exists ok.president+marxml at gmail.com
Wed Jul 30 07:23:37 MDT 2008


WTO Talks Collapse Amidst Developing Countries'
Reluctance to Sacrifice Food Security
Tuesday 29 July 2008

by: The Center for Economic and Policy Research

   Last-minute attempt to push through a WTO
expansion "deal" fails.

   Washington, DC - Despite trade ministers' hopes
for a last-minute deal, World Trade Organization (WTO)
negotiations collapsed yet again today, and observers
at the talks in Geneva say that the failure is not
surprising, given the reluctance of India and other
developing nations to sacrifice food security measures
in the wake of the recent global spike in food prices.

   Given President Bush's lame duck status,
negotiators had been called to Geneva to try to push
through a last-minute deal before Bush left office.
Because negotiators need about six months after a deal
on the major issues to complete the details of the
agreement, this possibility has now evaporated.

   "Given what's been on the table, no deal is better
than a bad deal. A Doha conclusion would have had
major negative impacts for workers and farmers in
developing countries. The tariff cuts demanded of
developing countries would have caused massive job
loss, and countries would have lost the ability to
protect farmers from dumping, further impoverishing
millions on the verge of survival," said Deborah
James, Director of International Programs for the
Center for Economic and Policy Research, who has been
observing the talks in Geneva.

   It is unclear why negotiations were proceeding,
given the fact that the U.S. delegation does not have
a mandate to conclude negotiations, as made clear by a
letter from Senators Feingold and Byrd sent to
President Bush last week. In addition, cuts in
subsidies agreed to by the U.S. are also incompatible
with the new U.S. Farm Bill passed by Congress, and
over-riding a veto by President Bush.

   Many developing nations not invited to participate
in the exclusive "Green Room" meetings in Geneva this
past week are likely to continue strong opposition to
a deal in the midst of a global economic downturn and
increasing concerns over food security.

   At a time when many countries are seeking to
reduce dependence on troubled economies in the U.S.
and Europe, and as fears of a global recession loom,
many nations are questioning the development gains to
be achieved from trade liberalization. The projected
gains from the Doha Round offer developing countries
very little in potential gains. According to World
Bank modeling, developing country benefits would be
just 16 percent of total world gains, or 0.16 per cent
of GDP. This works out to less than a penny per day
per capita in the developing world. Poverty reduction
- which in itself would be very limited - would reach
only 2.5 million people.[1] These projections do not
include many of the costs of implementing the Doha
Round, which UNCTAD estimates to be as much as four
times the projected gains.

   The Doha Round could also increase world prices
for food.[2] Since most developing countries are net
food importers, the recent increase in food prices has
led some developing country governments to reconsider
food security mechanisms such as tariffs and domestic
subsidies, which the WTO seeks to reduce. A number of
countries have also imposed restrictions on exports,
in response to the food crisis.

   "There just hasn't been much to gain for
developing countries in this round - or for that
matter, the majority of people even in the rich
countries," said CEPR Co-Director and economist, Mark
Weisbrot. "The attempts by the rich countries to
reduce policy space for developing countries in
manufacturing are widely seen as 'kicking away the
ladder' that rich countries like the United States
used when they were developing countries.

   "The whole process of subordinating national
policy to special commercial interests - whether in
agriculture, telecommunications, pharmaceuticals (one
of the most powerful interests and gainers in the
WTO), or the financial sector - has gone way too far.
Growth and development in most countries has been
hurt, and they are pushing back. In the United States,
too, rising inequality and now an economic downturn
have provoked a backlash."

   Throughout the negotiations, some developing
nations promoted trade policies and objectives at odds
with the Doha Round's objectives of opening developing
country markets, including commitments to food
sovereignty and defending policy space for alternative
forms of economic development.

   In a written statement, Bolivian president Evo
Morales said that, "The WTO negotiations have turned
into a fight by developed countries to open markets in
developing countries to favor their big companies."

   [1] Kevin P. Gallagher and Timothy A. Wise, "Back
to the Drawing Board: No Basis for Concluding the Doha
Round of Negotiations." Research and Information
System for Developing Countries Issue Brief. No. 36,
April 2008.

   [2] Sandra Polaski, "Winners and Losers: Impact of
the Doha Round on Developing Countries." Carnegie
Endowment for International Peace, March 2006.


   The Center for Economic and Policy Research is an
independent, nonpartisan think tank that was
established to promote democratic debate on the most
important economic and social issues that affect
people's lives. CEPR's Advisory Board of Economists
includes Nobel Laureate economists Robert Solow and
Joseph Stiglitz; Richard Freeman, professor of
economics at Harvard University; and Eileen Appelbaum,
professor and director of the Center for Women and
Work at Rutgers University.

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