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Sunday, 10 November, 2002, 12:17 GMT
Doha trade deal unravelling
New WTO chief Supachai Panitchpakdi
New WTO boss Supachai faces a tough challenge

One year after a new round of world trade talks began, there has been little progress in their central objective of shaping trade to help the world's poor.


I think it's difficult to envisage a substantive outcome to the Doha Development Agenda as a whole without a significant result on agriculture

Stuart Harbinson, WTO agricultural negotiaton chair
Instead, the rich countries have been arguing among themselves about who is to blame for the failure to make progress on agricultural reform.

Next week, 25 key countries will gather in Sydney, Australia to review progress towards the free trade goals, while thousands of protesters are expected to demonstrate outside the meeting.

It will be a key test of whether the World Trade Organisation (WTO) can meet its deadlines to liberalise trade in agriculture and provide cheaper medicines for developing countries.

Meanwhile the US and the EU are involved in an acriminous battle over steel tariffs, with the US using the "anti-dumping" clause to block imports of cheap steel from abroad.

Agriculture the key

Agriculture is crucial to developing countries, yet in the past year the United States has increased subsidies to its farmers, while the EU has still to agree plans to reform its bloated system of agricultural subsidies known as CAP.

The new trade round, called the Doha Development Agenda, was agreed after arduous negotiations on 9-13 November 2001 in Qatar.

It was supposed to lead to further reductions in trade barriers for agriculture, services, and textile imports, as well as ensuring that trade agreements did not damage the environment.

But Stuart Harbinson, the chair of the meeting and Hong Kong's trade ambassador, who now chairs the agricultural negotiations, said: " I think it's difficult to envisage a substantive outcome to the Doha Development Agenda as a whole without a significant result on agriculture because of the importance of trade in agriculture to so many countries."

The agriculture negotiations are stalled, with the United States the only major country to have tabled a proposal to open markets for developing country produce.

But the EU says it will put forward a "credible proposal" and said that unlike the US, it was committed to continuing reductions in the level of agricultural subsidies.

These subsidies amount to $300bn (189bn) per year, according to the OECD, more than six times the total amount of foreign aid that rich countries give to the poor.

The 145 WTO members are supposed to agree on the "modalities" of agricultural reform by March 2003 before presenting their proposals to a Ministerial review conference in Mexico in September.

Cheap medicines

Another key proposal that was agreed in Doha was the right of poor countries to get cheap medicines to treat diseases like Aids, malaria, and TB.

The idea was that poor countries would not be subject to the same patent protection that makes brand-name drugs so expensive in the West.

But the problem is that few poor countries - with the exception of India and Brazil - have the capacity to make their own medicines.

Negotiations, which are due to be completed by the end of this year, have bogged down over the question of under what circumstances the larger developing countries could export their cheaper medicines to others.

Regional trade pacts

The slow progress of the world trade pacts is encouraging countries to sign bilateral or regional trade pacts instead.

Last week the United States and Latin America agreed to resume talks on creating a Free Trade Area of the Americas, which would stretch from Alaska to Argentina.

And China and Japan moved towards signing a free trade pact with the members of ASEAN, the South East Asia trade association.

New research by Professor Andrew Rose of the University of California, Berkeley suggests that regional trade pacts are more effective than global trade deals in helping individual countries to gain access and open markets.

He argues that many trade objectives, such as opening trade in services, liberalising investment, and harmonising rules on competition - all of which supposed to be tackled in the latest trade round - are too evaded by rich countries.

Instead, specific trade concessions for poor countries are seen as more effective in overcoming their disadvantages.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Andrew Walker
"Professor Rose's views offer little comfort to the WTO's most vocal critics"

World trade talks

Farming

Steel wars

Other disputes

Regional trade deals

Background

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15 Nov 01 | Business
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