By David Loyn
BBC News
Developing countries are divided over what was achieved
One of the stated ambitions at the 2001 Doha meeting of the World Trade Organization (WTO) was that the developing world would get a trade round for free.
This meant it would not have to make concessions in order to secure benefits.
But four years on in Hong Kong, according to Oxfam's head of research Duncan Green, "the developed world has won a round for free".
"There is very little in here for developing countries," he says.
Behind the rhetoric of this so-called WTO 'development round' lies the hard-headed reality that trade terms really matter to the relative strength of a country's economy.
National interest
Strong positions are not easily given away to help development.
In the first 10 years of tariff reform and trade liberalisation, we literally deindustrialised Zambia
Zambian Commerce Minister Dipak Patel
That's why the poorest countries have found it hard to make headway in these talks: they have little to offer in return for their demand that the richest countries 'level the playing field' in food prices by cutting subsidies.
Their claim that the cuts would remedy inequalities of the past does not carry any weight at the negotiating table.
The key concrete concession they won in Hong Kong, which dominated the conference, was an agreement that rich countries should end export subsidies to farmers by 2013.
US cotton subsidies dwarf the output of many African countries
But most of these subsidies were being phased out anyway.
According to analysis by the aid agency Cafod, the share of export subsidies fell from 50% of EU agricultural spending in 1980 to 5% in 2004, and were set to drop still further.
The US had already promised to abolish export subsidies before coming to Hong Kong.
Cotton is treated differently from other agricultural products, and the US has now agreed to cut export subsidies here too - although this was no more than has already been demanded of it by a WTO ruling.
A separate requirement to reduce US domestic support for cotton farmers in the final Hong Kong text is not mandatory.
US cotton farmers receive funding worth more than the entire GDP of any of the four west African countries who are campaigning on this - Benin, Burkina Faso, Chad and Mali.
Tit-for-tat
In return for modest gains in agriculture, the poorest countries have made modest concessions in the other two pillars of the WTO process, services and non-agricultural manufactured goods.
But there was significant disappointment among interests in the richest countries that these did not go further towards a more comprehensive free trade treaty.
Most countries united against Japan, the European Union and the US on farm subsidies, in an alliance of four-fifths of the population of the world.
This unity did not extend to services and non-farm manufactured goods.
Larger developing countries like Brazil and India want more liberalisation in these sectors and liked the progress made.
Pascal Lamy succeeded in securing a consensus
Poorer countries still want to be protect their economies while they grow, and are concerned that they may have given away too much.
None broke ranks to walk out, but Venezuela and Cuba reserved their right to oppose the document, which should give them more leverage in re-opening discussions on these issues.
Still, the success of Pascal Lamy - the WTO director-general - was in producing any consensus at all after the collapse of the process at the Cancun WTO meeting two years ago, and the very low expectations of progress in the months leading up to Hong Kong.
Empty gesture?
The biggest disappointment of the poorest, so-called "least developed countries", was the development package tacked onto the rest of the deal.
The key new element gives them the right to sell their goods into developed countries without paying tariffs or being limited by quotas.
But it is too full of exemptions to make a real difference. America is expected to continue to put obstacles in the way of textile imports, while Japan has proposed to exempt rice, fish, sugar and maize.
The offer should, however, allow the poorest countries to sell goods with added value at the tariff-free rate, enabling them to develop food-processing industries. At the moment they have to pay high tariffs to sell processed food.
Zambia is dependent on the international trading system
Some of the least-developed countries were happy that the process was now back on track.
Uganda's Trade Minister, Gaudi Megeleko, said that there was now "something to build on" before another full ministerial meeting early next year to put flesh on the bones of the agreement.
Developing countries know that they have nowhere else to turn.
"In the first 10 years of tariff reform and trade liberalisation, we literally deindustrialised Zambia," Zambian Commerce Minister Dipak Patel - who led in negotiations for the least-developed countries - said before the WTO meeting.
"But now we are into it we have no other options. We can't go it alone. We don't have sufficient capital, so we have to rely on the multilateral trading system.
"It is ironic that it has turned out this way but that is our only salvation."
http://news.bbc.co.uk/1/hi/business/4542152.stm
Last Updated: Wednesday, 26 April 2006, 23:06 GMT 00:06 UKE-mail this to a friend / Printable version
EU and US rapped over trade talks
MPs attacked the EU's 'protectionist' stance on farming tariffs
The EU's tough negotiating stance could derail talks aimed at liberalising world trade, a group of MPs has warned.
The EU made unrealistic demands that poor countries open their markets while protecting their own, said the Commons International Development Committee.
The MPs also accused the Prime Minister of raising "unrealistic" expectations of a global deal to help poor nations.
Instead it urged the UK to do more to ensure the EU agrees a deal on trade before a key deadline slips past.
The committee added that, despite Tony Blair promising a comprehensive deal to open up trade to developing countries during the UK's presidency of the EU last year, World Trade Organisation (WTO) talks had achieved only limited results so far.
'Unrealistic expectations'
It put the failure down to Mr Blair backing EU negotiating tactics during talks in Hong Kong in December 2005 where some nations, such as France, had been determined to protect their agricultural interests.
The EU has been the cause of the crisis at the WTO, blocking every pro-development proposal
John Hilary, War On Want
"We accept that there were limitations on what the government could achieve in terms of trade during its presidency, but these limits should have been acknowledged earlier on so as not to raise the public's expectations of the outcome unrealistically," the committee said.
It added talks had been hindered by the inconsistent approaches of both the EU and US. It attacked America for "shamefully restricting" an agreement on free access to its markets for the poorest countries.
Peter Mandelson leads the EU in trade negotiations
Meanwhile, the EU attempted to "change the rules at half time" by demanding that developing nations open up their services market in return for reducing tariffs on farming goods.
"Neither the Commission nor the UK should be pressing developing countries in this way," the MPs said in a scathing attack on the EU and its trade chief Peter Mandelson.
It called on the government to "pre-emptively" set out what it is willing to agree to in order to open up access to its markets.
"Such action would demonstrate leadership and political commitment to a development round," it added.
The committee chairman, Malcolm Bruce MP, said that so far "what we see is endless wrangling around the margins on issues that will not in the end benefit the poorest people".
The report came days after the WTO admitted it had pushed back key deadline to agree a "roadmap" to a trade deal from April to July as major players in the negotiations remained too far apart.
'Cynical'
The report was welcomed by charities and trade justice groups who said it showed that the EU had only itself to blame for the talks hitting a standstill.
What we see is endless wrangling around the margins on issues that will not in the end benefit the poorest people
Malcolm Bruce, MP
Chairman, International Development Committee
"This report shows that Peter Mandelson has been pursuing an anti-development agenda in the trade talks all along," War on Want campaigns director John Hilary said.
"The EU has been the cause of the crisis at the WTO, blocking every pro-development proposal and sticking stubbornly to its own pro-corporate agenda."
The World Development Movement (WDM), added that the UK had "behaved cynically and dishonestly" on trade.
The best outcome poorer nations could now hope for was that the talks collapsed, WDM policy chief Peter Hardstaff said.
"The talks do not now offer the prospect of a good deal for developing countries, only shades of a bad deal," he added.
The Doha Development Round was launched in November 2001 with the aim of bringing the benefits of free trade to poor countries.
A last-ditch attempt to revive the talks in Hong Kong in December 2005 made only limited progress, and time is running out as the US goverment's negotiating authority to make a trade deal runs out in July 2007.
http://news.bbc.co.uk/2/hi/business/4947326.stm