October, 2003

September, 2003

Comment

Developing countries have 90% market share in cocoa beans but only 4% of global chocolate production. Tariffs which escalate with value-added processing lock developing countries into commodity exports. Nearly half of the world's people live on less than US$2.00 a day. The 49 least developed countries have 0.5% of the share of world trade. Agricultural subsidies in developed countries are worth about $1 billion a day - six times more than global aid flows. Of the 1.8 billion people in the world who are under 30, 1.5 billion live in developing countries.

These are just a few of the many statistics which reflect the growing pressures for a fair trading system. Although there are many explanations as to why the Cancun WTO Ministerial meeting failed to reach agreement, the underlying factor is that when such a meeting is loaded up with the many grievances and ambitions over world trade in the context of a systemic imbalance of economic power and resources, agreement is always going to be difficult. What is heartening is that the developing countries are taking a stronger stance. They certainly forced the EU to drop the proposal for negotiations on investment and competition. And they are slowly showing a glimmer of progress on agriculture. But, powerful economic interests in developed countries have many options including bilateral agreements where they can force concessions on investment rules, services etc. Whether the WTO can become an effective framework for multilateral trading rules hangs in the balance. While it may be that Cancun simply represents something of a delay in the negotiation of the Doha round, it may also signal a turning point in power relationships within the WTO. If that is the case, it is still possible for the round to deliver an agreement that is positive for developing countries. But it is just as likely that the WTO will fail to resolve the huge differences between members.