Multilateralism versus Bilateralism

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

After four years of negotiations, trade ministers in Hong Kong made modest progress that will keep the Doha round going and keep hope alive. Expectations for the World Trade Organisation talks were so low that any progress looked good.

Farm export subsidies will be dropped in 2013, when most ministers will have retired and when the European Union will again address its common agricultural policy. The Europeans had already accepted that export subsidies should go, but establishing a date was important. A lot can happen in eight years.

Market access for the poorest countries has been improved. Cotton-export subsidies will disappear next year. Yet, cruel exemptions remain on sensitive products - for example, rice, fish and maize in Japan. This could mean little for the poorest countries unless infrastructural support and capacity is built: an enlarged fund for this purpose has been pledged. This builds on the work I did as director-general. New deadlines have been established for proposals to be considered. Now let's see if they can be met, because they have been ignored before. Can all this come together by next April?

Potential failure can focus the mind. Elections in France next year and the expiration of Washington's legal ability to negotiate in 2007 will stir negotiators. What won't work is to tell ambassadors in Geneva to try again - unless there are changes in instructions and positions from national capitals. If the United States, the EU, Japan - and now China, Brazil and the other Group of 20 developing nations - cannot reach an understanding, then nothing will happen.

Noble communiques were released after meetings by the Asia-Pacific Economic Co-operation forum and the Group of Eight industrialised nations, all saying the same thing: "Do the deal." Yet such broad, bland statements hide the substantial differences between countries. Perhaps these leadership meetings ought to admit to these differences and inflexibility - or resolve them.

This cannot be just an agriculture round. So smart negotiators ought to be working not only on their needs but also on what other parties need. One thing is sure: trade liberalisation will not go away, because it works. The big question leaders must ask themselves is: do they want a multilateral system or not? At present, they are spending more time on bilateral and regional deals.

In Malaysia, during the same week as the Hong Kong meeting, Asian and some Pacific leaders met at the first East Asia Summit. They spoke of a possible free-trade deal in the future - when they have all safely retired. That was a bit like the Apec forum, which agreed to free trade among developed countries by 2010 and developing nations by 2020. These regional and bilateral deals insult the concept of free trade, as they create costly exemptions, new privileges, contradictions, red tape and excuses.

Added to this, no dispute system that works has ever been created outside the WTO. Of course, I would do the same if I were a leader; it's better than nothing, and dangerous to be left out.

The Doha deal stands waiting to be done. I fear a small, weakened, watered-down agreement could be reached and then everyone could again congratulate themselves.

But then, as always, every deal is just yesterday's compromise: the best that countries could agree to. That's why I still get annoyed when the media says "WTO fails". It doesn't - it can only do what its members allow it to do.

(Originally appeared in the December 21, 2005 issue of South China Morning Post in Hong Kong, reproduced here with permission.)