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WTO’s Doha round derails again

Stephen Beard Jul 29, 2008

WTO’s Doha round derails again

Stephen Beard Jul 29, 2008


Kai Ryssdal: It seems trade officials meeting in Geneva this week didn’t get the memo about globalization being the economic buzzword.

The most recent round of World Trade Organization negotiations ended in disarray today without coming to agreement on some key issues.

Marketplace’s Stephen Beard’s on the line from London.

Hello Stephen.

Stephen Beard: Hello Kai.

Ryssdal: It’s been a long time since these talks started — six or seven years. Remind us what they were about in the first place, would you?

Beard: Well, this is the Doha round, which as you say began seven years ago in the Qatari city of Doha, and this was called the development round designed to help the developing world. Basically, three elements here: Rich countries supposed to cut their farm subsidies so that farmers in poor countries can compete, poor countries supposed to open up their markets to more industrial goods from the developed world and a big shakeup in the service sector, so less restrictions on the movement of skilled workers around the globe. That was the plan, which appears to have finally collapsed amid a great deal of acrimony in Geneva today.

Ryssdal: What happened because there was progress in some areas, wasn’t there?

Beard: Yes. What seems to have happened is that the U.S. fell out with China and India. In other words, the world’s biggest economy fell out with two of the world’s fastest growing emerging economies. They fell out over the issue of farm import rules. China and India wanted to be able to protect their farmers from foreign competition by raising tariffs on farm imports if there was a sudden surge of imports or if the price of those imports fell and now those safeguards already exist under the current rules, but the argument has been about how much those tariffs should go up. The U.S. that what China and India have been calling for is too much; it’s protectionism.

Ryssdal: Does “ended without agreement” as I mentioned din the introduction really mean collapsed? I mean, are they done?

Beard: Well, one has to be weary about this because Doha has collapsed so often in the past and yet somehow struggled back onto its feet again. It’s condition does look pretty terminal because of the timetable. We’ve got August looming now, the negotiators will be heading off for the beach. We’ve got after the summer the U.S. preoccupied with the presidential election. The general view is that there’s not going to be much appetite to revive these talks until next year, by which time, of course, there’ll be a new U.S. government in power and the fear is that the whole global economic climate may have darkened even further and by then, the major players will be even less willing to make concessions.

Ryssdal: Well, if the global economy has moved past this round of negotiations, does it matter that Doha has ended without agreement?

Beard: Well, there are two schools of thought here. The worst case scenario is that the world will now lurch into a new era of protectionism, but that is the apocalyptic view. What certainly is true is that the existing trade liberalization rules won’t disappear overnight. They’re still there in place. We could well carry on as we are. But there is a danger that some big trading players may abandon the multilateral approach and start doing deals with each other. That will mean undoubtedly that smaller, poorer countries could lose out.

Ryssdal: Marketplace’s Stephen Beard at the European Desk in London. Thank you Stephen.

Beard: Thank you Kai.

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