Is Doha doomed?

["Ian Murray" <seamus2001@xxxxxxxx>]

Dangerous road to Doha

Success at this week's trade talks is critical. But are they doomed
from the start, ask Nick Mathiason and John Madeley

Sunday November 4, 2001
The Observer

The United States is hated by poor nations because they believe the
world's superpower manipulates global trade rules and imprisons them
in debt. Europe, with its huge subsidies to farmers and its tight,
protected markets, is little better in their eyes.
High-profile debt relief initiatives have failed. Only 13 per cent of
the $100 billion debt write-off promised by G7 countries in 1999 has
been wiped, says Jubilee 2000. Under these circumstances,
globalisation for most developing countries is a game watched from the
sidelines. The winners live in the north.

The last major World Trade Organisation ministerial meeting two years
ago in Seattle broke down amid a hail of rubber bullets and
accusations that America and Europe refused to entertain developing
countries' concerns. This week world Trade Ministers gather in Doha,
Qatar, to pick up the pieces. Their aim is to launch a new round of
talks at a time when America needs to keep the world onside as never
before.

The US has to give poor countries, the majority of whom are Muslim, an
economic leg-up if the delicate coalition to wage war against
Afghanistan is not to implode. The markets are watching, too. US
Federal Reserve chief Alan Greenspan last month said successful WTO
talks were vital to kick-starting a contracting global economy. Last
week, the UN's International Labour Organisation said 24 million jobs
would be lost by the end of 2002.

These talks may be vital, but there is no guarantee they will go ahead
in Doha, even at this late date. For one, there are security fears:
the number of lobbyists travelling out, particularly from America, is
dwindling. Even as Trade Ministers prepare to travel, splits and rows
are escalating. The US is accused of adopting divide- and-rule
tactics. Subtle US diplomatic arm-twisting offers compromise to some
countries and threatens the withdrawal of aid to others, while hoping
for opposition coalitions to split.

Sources in Geneva say that Bolivia and the Dominican Republic have
been leaned on to agree with US demands on trade declarations or face
reductions in aid. A number of African countries have been told that
they will get cheap life-saving drugs if they wave through US
liberalisation proposals.

Tempers are fraying. Last Wednesday, Indian trade minister Murasoli
Maran threatened to leave the World Trade Organisation because, he
argued, developing countries had no part in shaping the trade agenda.

The Least Developed Countries group met last week in Geneva and issued
a statement that said none of their input was getting through to the
Doha draft declaration. The Africans affirmed their opposition to new
issues such as environmental, trade facilitation and competition
issues being included.

Stuart Harbison, chairman of the WTO's General Council, upped the ante
last week when he said the draft was final. Insiders say that the
splits are worse now than before the Seattle talks.

European Commission insiders are trying to douse the flames by saying
that India perennially threatens not to attend ministerial meetings
and that the gulf between camps is narrowing. Yet the sticking points
are many, and whatever the technicalities, trade treaties are a matter
of life or death.

The most immediate concern is access to life-saving drugs. Drugs to
counter TB, malaria and Aids are too expensive for poor countries
because they are protected by 20-year patents under the Trade Relate
Aspects of Intellectual Property Rights (Trips) treaty. Developing
countries want Trips relaxed and clarified so they can import cheap
generic drugs. But the UK, along with Germany and the US, opposes
this.

Over the past year the EC has become more 'progressive' on this issue,
but a liberal resolution from Europe has been blocked by UK and German
trade officials desperate to protect their drug companies through
what's known as the 133 Committee. Kevin Watkins, Oxfam's senior
policy adviser, said: 'At the last Labour Party conference, Tony Blair
said it was up to prosperous countries to create a framework to remove
poverty from Africa. But what Britain is doing with regards to Trips
is a crime.'

What developing countries want is fiscal reform, plus access to
markets. A Swaziland sugar farmer may produce a cheaper crop than his
European equivalent, but that doesn't mean he can sell to Europe. EC
export subsidies ensure Swaziland can't compete with Europe. The
result is African destitution.

America is under pressure to stop dumping subsidised cheap exports,
usually of steel, on countries such as Mexico and India, whose
indigenous industries can't compete.

The big prize for the EU and the US is the liberalisation of trade in
services. This could allow private sector companies unfettered access
to new transport and utility markets. Lobbying by US insurance groups
and healthcare companies may ultimately open up education and health.
The EU may be prepared to reduce agricultural subsidies if what's
known as the General Agreement on Trade in Services Treaty is
rubber-stamped.

Doha is all about trying to start a new round of trade talks. The last
one, the Uruguay Round, took seven years and was completed in 1993.
Developing countries say most of Uruguay's provisions have not been
implemented and that a new round is premature.

This week could see a big bust-up or an anodyne statement introducing
moves to kick-start a new trade round. But it will take a decade to
complete. There will be no benefits to the global economy for some
time.

There's more pre-Doha debate in our online globalisation special at
www.observer.co.uk/global