WTO Talks: Nothing Ever Happens in Geneva

Mike Moore  (former Prime Minister of New Zealand and former Director-General of the World Trade Organisation)

It is now a little under a month until trade ministers meet in Hong Kong with the hope of advancing the ambitious Doha Development Round. Unfortunately, the timetable for concluding the round has not been met.

The failure to get some progress and momentum for the round at Cancun, Mexico, when that ministerial conference collapsed, cost the global economy at least two years. Talks on key agricultural issues did not advance in Geneva last week.

However, this is not the end of the world; ministerial meetings have failed to agree before. It shows how important the World Trade Organisation is to the global economy. These conferences are real; the decisions are binding upon governments, and where there are differences in interpretation of agreements, there is a binding disputes-settlement system.

That is unique in the international architecture. Because these agreements must all be ratified by parliaments and congresses, ministers must carry their governments with them. Nowadays, ministers often have more difficulty negotiating with domestic interests than with their ministerial counterparts.

WTO ministerial meetings are different. Truthfully, nothing much comes out of international meetings of ministers of social welfare, labour or the environment. That is why it is easy for them to meet, agree, fudge and go home unnoticed. The Hong Kong meeting is vital if the benefits of the Doha Round are to be shared over the next few years.

Several key ministers met recently in London, and nearly 30 assembled last Tuesday in Geneva. The reports were not good: talk was of lowering ambitions, increasing the timeline and widening the agenda. International institutions like the WTO do not fail; they just adjust their objectives to meet the lack of results.

Neither the world economy nor the global trading system can afford the rejection of multilateralism, the WTO or the Doha Round. Leaders cannot afford to walk away from the ambitions of trade liberalisation agreed to at Doha when I was WTO director-general.

A successful Doha Round will raise the global economy by US$3 trillion, lifting over 300 million people out of extreme poverty. These are big stakes, especially for the poorest nations. Why, then, is it so difficult to make progress now?

Unless there is progress on agricultural issues, the round will not be concluded. Reform in agriculture would bring huge benefits to Latin America, Africa and other agricultural exporters. For Africa, this means the equivalent of increasing all overseas development aid by 500 per cent.

It is interesting that it is now the Group of 20 (G20) that demands free trade in agriculture, insisting that rich countries at last live up to the economic ideals their leaders so often speak of with such respect.

The G20, led by Brazil, India, China and South Africa, changes everything. The WTO is no longer a rich man's club. The United States and the European Union have offered the biggest cuts yet in their subsidies, but it is not seen as enough by agricultural exporters.

What is the worst that can happen? Postponing the conference would set a dangerous precedent. The WTO rules state that ministerial meetings must be held every two years, to hold the organisation accountable. France has already said European Union Trade Commissioner Peter Mandelson has gone too far with his proposals on agriculture; the US and G20 say they do not go far enough.

Nothing keeps happening in Geneva. The losers, as always, will be the poor in rich countries, and the poor in poor countries.

(Originally appeared in the November 14, 2005 issue of South China Morning Post in Hong Kong, reproduced here with permission.)