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Doha round and South-South solidarity

The current world financial crisis has taken a toll on both North and South, but it is also a very good opportunity to move out of the concept of free trade to regulated and negotiated trade. Developing countries wish the Doha Round to be a Development Round, but this can only be achieved when they unite and struggle.

So wrote VPDF Vice-President Mr. Nguyễn Văn Thanh in a recent research paper updated April 1. Titled “From Seattle to Doha: Solidarity is the main weapon of developing countries”, the paper reads:
The ministerial meeting in Doha, Qatar, with its Doha Development Agenda (DDA), practically pulled the WTO round after the debacle of the third ministerial meeting in Seattle. C. Fred Bergsten, a prominent partisan of the WTO, once said that this organization is like a bicycle: it collapses if it does not move forward. By agreeing on a declaration giving momentum to new negotiations for more liberalization, the Doha meeting in November 2001got the bicycle upright and moving again. Mike Moore, then WTO Director-General, was not exaggerating when he thanked the ministerial for “saving the WTO” after the debacle two years before at Seattle.

The Doha meeting took place amidst conditions that were unfavorable to the developed countries’ interests. The September 11 events provided a heaven-sent opportunity for Robert Zoellick, then US Trade Representative (USDA), and Pascal Lamy, then EU Trade Commissioner. They quickly seized it to increase pressure on developing countries and force the latter to agree to the launching of a new trade round which, according to their rationale, was needed to counter the global downturn that had been worsened by the terrorist actions. More pressure was thus imposed on developing countries by threatening that they would be held responsible for the possible failure of another ministerial meeting, the possible collapse of the WTO, and the likely global recession.
Instead of acknowledging the failure and traps of trade, the trade ministers of  big countries kept urging for the application of free trade principles in all fields of global trade, leaving too little room for national strategies, and putting aside such important social issues as environment and labor. Furthermore, they no longer respected the commitments they had made to end their protectionist policies. They intentionally ignored the promises about giving “special and differential treatment” to poor countries.
Can the answer be the WTO? Many doubts remain over this organization and the neo-liberalism it is practicing, its endorsed partiality for rich countries, and its opacity, which has become a so-called trade culture of developed countries. If the WTO is to maintain its relevance, it should be organizationally restructured, and methodologically democratized. When the balance of power is tilting to major developed countries and their controlled institutions, it is not easy to have a WTO that speaks for the rights of poor countries or at least is not so partial. However, if developing countries unite and manage not to be divided or lured by transient interests, then this is not totally unlikely.

The November 2001 Doha Development Agenda (DDA), which had been scheduled tentatively to last until January 2005, would cover services, agriculture, industrial tariffs, reforming of anti-dumping measures, market access, environment, and regional agreements. Seven years later, on December 17, 2008, WTO Director-General Pascal Lamy had to recognize the reality that “calling Ministers to try to finalize modalities by the end of the year would be running too much of a risk of failure which could damage not only the Round but also the WTO system as a whole.” Lamy also claimed that “a Doha Development Round which is better adapted to the new trading realities and which responds to the needs and aspirations of all its members and in particular developing countries is worth fighting for. This has been and remains our priority for 2009 but this endeavor takes place within a more global portfolio of WTO activities”.
Seattle revealed that the solidarity power of the world’s progressive people could intercept the intrigues of neo-liberalism, while Doha showed that big countries did not exclude any possible artifice, including intimidating, buying off, coaxing, etc., to seize the lion’s share. Conflicts on agricultural subsidies and exports and services liberalization will continue.
The last several decades have witnessed a surge in global economic growth. More open markets create opportunities for growth by encouraging more efficient allocation of resources. For some countries, this means that labor and other resources may shift from agriculture and other primary production sectors to higher value economic activity, especially to knowledge economy.  More open markets also encourage transfers of technology and technical expertise. With growth in human and physical capital can come increased productivity and investment in manufacturing and service industries. Where these developments bring higher incomes, an increase in consumer demand for goods and services provided through global markets may in turn develop.

Countries often impose policies that interfere with open markets in agriculture. WTO members have held agricultural negotiations to address three categories of policies that can distort trade: market access, which includes import barriers like tariffs and tariff-rate quotas (TRQs); domestic support, which includes producer subsidies through income and price support programs; and export subsidies. By distorting production or consumption decisions, each of these policy categories can impose economic costs on both the countries that employ them and their trading partners.

The current world financial crisis has taken a toll on both North and South, consumer and business confidence, but is also a very good opportunity to move out of the concept of free trade to regulated and negotiated trade. Governments shoud play a more “interventionist” role. Cooperation and struggle should be companions; cooperating while holding fast the principles of independence and sovereignty, accepting no form of interference into one’s internal affairs, and always resorting mainly to national strength. Developing countries wish the Doha Round to be a Development Round. However, this can only be achieved when they unite and struggle./.









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