Doha collapses (the trade round, not the city)
“There is no use beating around the bush, this meeting has collapsed, members have simply not been able to bridge their differences,” the World Trade Organization’s Director-General Pascal Lamy told journalists.
And the reason being given for the collapse of this seven year long set of trade negotiaions is India and the USA’s failure to reach an agreement on an SSM or special safeguard mechanism that allows countries to raise tariffs to protect their farmers from a surge in imports. But according to the Age it may be more complicated than that.
India and other developing countries wanted the mechanism to kick in at a lower import surge level than has been proposed in order to protect their millions of poor farmers from starvation.
Others wanted it to take effect at a higher rate so as not to hurt exporters.
Sources said after Tuesday’s breakdown that the United States was stalling for time to avoid a rift over another sticking point, cotton subsidies.
“The US cannot afford to give way on cotton, so it does not even want to go into the issue on cotton,” an Asian diplomat told AFP.
“It knows that India would not give ground on SSMs, in which case India would be blamed in case of any collapse.”
Radio New Zealand reported this morning that another part of the problem was the wealthier industrialised countries continual push to open up the services sector to private investment.
While most people can see the logic in putting a fair transparent set of rules around the international trade of goods, the services sector is far more tricky. Countries like New Zealand, that have pushed had and fast on services as though they are nothing more than trinkets to be bought and sold, rather than integral components of communities’ public infrastructure (for instance, water, power, education, health care and waste management) have failed the WTO.
Their (our) desire to push the WTO along at breakneck speed - if you can describe anything that happens in the WTO as happening at breakneck speed - has undermined its credibility in the international arena and made it impossible for countries to respond with anything but very protectionist negotiating strategies.
This collapse should be as good a sign as any that the current ‘business first, community and democracy distant second’ model for the WTO is flawed and needs a serious overhaul. This is important because the alternative to the WTO could well be a range of even less democratic bilateral and multilateral deals such as the New Zealand-China preferential trade agreement.
July 30th, 2008 at 12:22 pm
ANother 8 years, another “no change” result!
The WTO is just an excuse for jollies for the boys (and girls) and we should get out and save ourselves a fortune. Bi-lateral negotiations are always going to fare better than an attempt at designing a ‘one size fits all’ trade environment by committee. Remember the Camel - a mobile home designed by committee!
July 30th, 2008 at 11:31 pm
Of course as Sue Kedgley was out cheerleading those who would happily see this fail, I’m hardly surprised the Greens don’t care that an opportunity to make a fundamental difference to NZ’s terms of trade has failed. Governments are not communities, trade barriers are restrictions on communities, consumers and taxpayers as well as governments. This will cost in enormous lost opportunities for trade and development, and meanwhile people will wonder “what to do about Africa” when the answer was for the semi-rich third world, EU, Japan and USA to throw off the shackles of their own protectionism.
July 31st, 2008 at 6:10 am
Another nail in the coffin of Globalization ? Along with the unholy mess the financial system is in at present. They are intimately tied together, and are set to collapse spectacularly, along with the US Dollar. I’m moving my assets as far away from any dollar exposure as I possibly can, but it’s difficult to find a safe haven in a ‘perfect storm’.
July 31st, 2008 at 8:59 am
bigblukiwi, i’m converting all my us dollars into US penny’s, at least that way when the US finally goes Mugabe style on the US dollar i can melt them all down and have some zinc and copper.
i just need to convince my work here to stop direct debiting my pay check but rather deliver me a bucket of 1 cent penny’s instead
Of course NZ is way ahead of the US since we got rid of our 1,2 and 5 cent piece and nobody in NZ even noticed.
July 31st, 2008 at 12:37 pm
I noticed the five cent coin going - tuataras don’t get enough exposure.
Plus you need them for the ‘Lady Luck’ machine at the Aro Street fish and chip shop.
August 4th, 2008 at 1:26 am
It’s amazing - who could have predicted there would be such problems …
“Agricultural subsidies targeted
Originally published 11:40 p.m., December 7, 2003, updated 12:00 a.m., December 8, 2003
U.S. and European agricultural subsidies, worth billions of dollars to farmers, will be open to attack at the World Trade Organization as soon as next month.
….
“I think U.S. and European subsidy policies are subject to legal challenge at the WTO. There are billions or tens of billions of dollars in consequences,” said Richard Steinberg, a law professor at the University of California at Los Angeles.
…
The United States paid farmers almost $15.7 billion in subsidies during 2002, and the U.S. Agriculture Department projects $18.7 billion for 2003. Subsidies, which rise and fall opposite market prices, peaked in 2000 at $32.3 billion, the USDA said.
The 15-nation European Union annually spends roughly $50 billion, nearly half its annual budget, on its common agricultural policy and rural development. ”
If only I’d gone to school …
If the US and Europe won’t reduce subsidies as part of the WTO negotiations then they won’t do it in unilateral negotiations. You should have heard what the Aussies here thought of the Aussie / US agreement.
BTW - people here on international contracts have been switching from US$ to Euros when they renegotiate for at least the last two years.
August 4th, 2008 at 1:30 am
forgot to add this.
http://www.washtimes.com/news/2003/dec/07/20031207-114046-8545r/