Magazine article International Trade Forum

The Challenges of Doha, Hong Kong and Beyond

Magazine article International Trade Forum

The Challenges of Doha, Hong Kong and Beyond

Article excerpt

While there are advantages and disadvantages for developing countries in the Doha round of trade talks, many are trying to make the global trading system work for them.

The Doha round of the World Trade Organization (WTO) is heading towards a critical Ministerial Meeting in Hong Kong in December. Many thorny issues remain to be resolved and some sceptics have voiced doubts that the negotiations can be wrapped up by the end of 2006, as scheduled. Many developing countries would like to ensure that an agreement does not leave their economies and their industrial and agricultural producers overly exposed to powerful competition from the rich countries and their multinational companies, nor undermines the preferential access to the markets of industrialized nations that some have enjoyed. Nevertheless, they have been participating actively in the talks. During a special session at ITC's annual meeting, the Joint Advisory Group (JAG), in April 2005, government officials, trade negotiators and private sector representatives from Africa, Asia and Latin America voiced their concerns and their ideas on how ITC can help ensure that a Doha round agreement meets its prime declared aim: boosting development.

Countries recognize liberalization benefits

Despite slow progress during the first nine months of 2005, developing country officials have been vociferous in their commitment to the round and the WTO.

"Let me reiterate my deep faith in multilateralism as it applies to the trading system," Rwanda's President Paul Kagame told a symposium at the WTO in April. "In Africa," he said, "we recognize that trade and investment, and not aid, are pillars to development. [...] We know that increased international trade leads to optimal resource allocation, enhances efficiency and facilitates the transfer of knowledge and know-how."

The Indian Finance Minister P. Chidambaram was equally forthright in a speech in Dusseldorf, Germany, in June. "We believe that India needs the WTO more than the WTO needs India," he said. Writing in the International Monetary Fund's journal, Finance & Development, Sok Siphana, Cambodia's Vice Minister for Commerce (who from October 2005 is a Director at ITC) said that his country "views its participation in the multilateral trading system as a means of integrating into the global economy and maximizing the benefits from international trade".

These leaders - and the dozens of others from the developing world who express similar views - are, of course, pragmatists rather than free-trade idealists. "Frankly speaking," S.B.C. Servansing, Ambassador of Mauritius to the WTO, told the JAG session, "my country has little to gain and a lot to lose potentially from the current multilateral trade talks. [...] So why should we participate? I think the answer lies in understanding that today one has no choice but to be part of the global economy. The way to survive is to embrace change while at the same time trying to actively influence it."

Many developing countries feel they emerged from the 1986-93 Uruguay Round with few or no benefits in return for opening up their goods and services markets. Where, then, do they fear they can lose out again this time? And what do they hope to gain from the Doha negotiations?

Agriculture, industrial goods at focus of talks

In Doha, to win agreement from their trading partners in Africa, Asia and Latin America to start the negotiations, the United States and the European Union had to agree to put their varying forms of farm subsidies on the table. However, the talks have yet to produce a clear vision of how these will be dismantled. Developing countries, who have wielded a collective diplomatic clout in the Doha negotiations far beyond anything they managed in the Uruguay Round, say their elimination would bring their own agricultural producers far more in terms of extra revenue than any aid programmes. Developing countries would gain from increased exports and more sales on home markets, where local farmers at present have to compete with subsidized imports from North America and Europe. …

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