Sunday, 24 June 2007

Trading insults: Doha disappoints again

There was a depressing sense of déjà vu to Thursday’s collapse in the Doha trade talks. The meeting of the so-called G4 – the US, EU, India and Brazil – was widely seen as a last chance to achieve the target of getting a deal by the end of the year.

Insults and recriminations quickly followed. The US and EU pointed the finger at Brazil and India for not moving far enough on opening up access to their manufacturing markets. Meanwhile Brazil and India argued that the US and EU were demanding too high a price for what were unacceptably unambitious reforms to their trade-distorting farm policies.

It is easy nowadays to become numb to bad news on trade talks. Last July's suspension of the trade talks was a particular low. The early optimism after the trade round was subsequently resumed seems to have been replaced with a tangible negativity about the prospect of the Doha talks living up to their much-hyped objective of being the first-ever “development round”.

But perhaps the greatest danger right now is fatalism. The fact is that a deal is tantalisingly close, and still possible. For the World Trade Organisation’s Director General Pascal Lamy, while a convergence of views among the G4 would have been “helpful”, it was not “indispensable”, and ultimately some, including Oxfam, are happy the process will now revert to a broader discussion among the WTO’s 150 members.

Staying focused and optimistic is vital, if only because failure would be disastrous. Trade is a far more powerful lever for poverty reduction than aid could ever be.

Above all, as negotiators try and find a way forward in the corridors of Geneva, they should remember that business (despite what a vocal minority may say) is overwhelmingly supportive of a deal for Africa. The US and EU should also bear in mind that the vast majority of businesses in their countries recognise the importance of a sound deal for more developed economies as well.

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