Doha, What Next?

Article excerpt

The business community needs to show the power of partnership in making the Doha promise a reality. Businesses of developing countries have an interest in staying engaged and making their views known to government negotiators - and to the public at large.

People have varied reactions to the suspension of trade talks on the Doha Development Agenda. That is because the stalemate in the Doha Development Agenda reflects both the promise and the perils of globalization.

Businesses in developing countries are the prime audience concerned by the outcome of the talks. But the voice of business needs to be stronger. Without their input, trade negotiators cannot be effective.

Two sides to a coin

Globalization has made its mark, with trade between countries skyrocketing. According to the World Trade Organization (WTO), trade has risen from $2.3 trillion in 1980 to $12.6 trillion in 2005.

WTO has been an important driver in this process. More open trade rules have allowed firms to take advantage of markets and technology advances, and discover new business opportunities. These firms trade across borders as they never have before, with developing countries getting an increasing share of the benefits.

Indeed, a recent report on the world economy in The Economist magazine notes that the emerging world now produces 43% of world exports, and buys half of the exports of America, Japan and the Euro area combined. What's more, last year it accounted for over half of global economic output (measured in purchasing power parity) and over half the growth in global output. It also holds 70% of the world's foreign exchange reserves.

Yet there is lingering discomfort among those who are left out; the world's 50 poorest countries have not had a share in the growth of global trade. Globalization has had a social cost. Despite its success, the challenge of globalization remains the growing gap between rich and poor, as demonstrated by the confrontations and political stalemate attached to the Doha Development Agenda.

The vision behind the Doha Development Agenda was to contribute to the efforts of governments to alleviate poverty in their countries while creating real and sustainable opportunities for wealth creation. Poor countries have real concerns about preference erosion and declining terms of trade for commodities in general, as well as market access for specific commodities, such as cotton. They express concerns about the food and livelihood security of their people, as well as their positions on services and trade facilitation. These concerns reflect their perceived inability to implement commitments arising out of these agreements.

Where is the voice of business?

In part, this situation has arisen because governments have a lack of trust and confidence in the process to address the real problems of transforming business sectors without major social dislocation. Regardless of the state of play, countries must prepare their economies and governments should be armed with the information they need to negotiate terms that will allow their businesses to compete internationally.

To be effective, government trade negotiators need to listen to business. Without the input of business, trade negotiators cannot be effective. …