THE WORLD awaits another round of major trade talks in December of this year, when there is a key World Trade Organisation (WTO) meeting. Unfortunately, major stumbling blocks at two previous key meetings (Seattle in 1999 and Cancun in 2003), have led to much pessimism on whether this latest meeting will advance trade dialogue much further. We are seemingly stuck into having gone too far to turn back, but unable to proceed any further along the free trade path.
For those who don't know, the WTO is the organisation that has replaced the General Agreement on Tariffs and Trade (GATT). In its decade of existence, it has drastically altered the fundamental way that trade is done around the world, by its drive to remove trade distortions across the globe (whether through reduced tariffs, the elimination of tariffs, removal of trade preferences, and certain hidden subsidies).
Its broader mandate means it has moved beyond manufactured goods, to address intellectual property rights, various other services, including government services, and to tackle trade in agriculture. The latter issue is what has led to the deadlock in global negotiations, first at Seattle and then at Cancun.
Developing countries have seen fundamental challenges to their special trading relationships that existed, and with the changes have come new partnerships and many major challenges that will impact on what agricultural goods they can competitively produce in the future. Jamaica, for instance, will likely suffer reduced export markets for sugar and bananas once the timeframe for phasing out trade distortions are ended.
What has been galling to these developing countries however, and remember there is no homogeneous group of developing countries (as some interests conflict and even collide, as is the case with bananas and sugar), is that it has been the failure of the bigger or richer developed countries (U.S., the EU and Japan) to make substantial concessions on agricultural reform that could allow global trade in agriculture to be more equal. Agriculture while a small part of the economies of these of countries, carries a disproportionate political power, especially in a country like France, that makes agriculture sacred cow.
How to eliminate these agricultural support schemes is what is holding up further trade concessions within the WTO. Until one nation or group blinks however we will remain adrift. It will either take some smooth skin, snake-oiled charm from the various trade diplomats/ministers to get the process going by December, or we could be having yet another wasted conference, that is just offering photo opportunities for anarchists and anti-globalisation protesters.
