Stalled Doha Trade Talks Are Symptomatic of a Deeper Crisis of Multilateralism

Cape Times (South Africa), February 19, 2008 | Go to article overview

Stalled Doha Trade Talks Are Symptomatic of a Deeper Crisis of Multilateralism


BYLINE: Mills Soko

Amid the general pessimism about the prospects of the Doha round of global trade talks, it is tempting to dismiss the multilateral trading system as a failure. It is not, as the recently released report of the Warwick Commission attests.

Owing to multilateral efforts over the past 60 years, barriers to international commerce have declined progressively - with trade tariffs decreasing to an average of 4% in some countries. International trade, one of the principal engines of global growth, has expanded faster than world economic output.

The conduct of cross-border trade has become rules-based and, albeit not perfect, the World Trade Organisation's (WTO) dispute settlement system has played a key role in enforcing agreements.

Today, there is greater transparency in national laws and regulations than was the case a decade ago. Underlining the WTO's universal attraction, membership of the body has increased appreciably over the past few years and currently stands at 151.

Even so, the report identifies five important challenges that plague the global trade system and which ought to be resolved if it is to survive in the 21st century.

First, there has been a discernible decline in support for globalisation and open markets, especially in industrialised countries. This has been sparked mainly by concerns about static wages, job losses, rising inequality and ecological damage.

Trade is increasingly viewed as part of the problem, not solution. And this has eroded domestic support for further trade reform in many countries. Compounding the problem has been weak political leadership on trade matters. Fearful of being voted out of office, politicians have been reluctant to make painful economic decisions that might alienate powerful domestic constituencies.

Second, policymakers have to grapple with an ever more multipolar world trade order. The rise of emerging economies (especially China, India and Brazil) has transformed power relations in the global economy. This has strained the institutional architecture of the WTO and highlighted the inadequacies of its decision-making structures and processes.

Third, the WTO's objectives have become contested and, in some cases, contradictory. As the influence of developing countries in the WTO has grown, they have actively campaigned for the prioritisation of their concerns such as securing larger market access for their agricultural products and renegotiation of WTO rules.

Conversely, the primary interests of industrialised countries have coalesced around the the so-called new generation trade issues in which they have a competitive advantage, notably investment, competition policy and government procurement. These are issues which many poor countries do not fully understand and for which they are not adequately prepared to negotiate.

Fourth, policymakers have been increasingly called upon to balance the need to make the WTO's decision-making processes fair, transparent and inclusive with the necessity to promote greater efficiency in the institution's operations and procedures. …

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