WTO Trade Reform Promises Broken, ‘Development Round’ Turned on Its head

http://www.oxfam.org.uk/press/releases/trade_071205.htm

Oxfam Press Release - 7 December 2005

Trade Reform Promises Broken, ‘Development Round’ Turned on Its Head

The trade reform promises rich countries made four years ago are set to be broken at a World Trade Organisation (WTO) meeting in Hong Kong next week, international agency Oxfam warned in a new report published today < Blood on the floor: How the rich countries have squeezed development out of the WTO Doha negotiations >.

Trade has the potential to lift millions out of poverty. However, what was meant to be a ‘development round’ has been turned on its head, with rich countries demanding greater and greater concessions from poor countries, but giving very little in return.

“Negotiations that were meant to deliver needed reform of trade rules to boost development have been derailed by back and forth demands between rich countries that have created a standoff. This is not the kind of leadership that will improve the lives of poor people,” said Phil Bloomer, Head of Oxfam International’s Make Trade Fair Campaign.

“Rich countries have insisted on a number of concessions from poor countries, saying they need to see ‘blood on the floor’ from other WTO members in order to sell the deal back home. Such power politics turn upside-down the promises made in Doha. On their current course, the negotiations will have little benefit for the poor and may even hurt some developing countries,” he added.

Agricultural reform is essential to help the world’s poorest people, yet rich countries have not delivered on promises to end dumping and improve access to imports from poor countries, says Oxfam. Progress is stalled on cotton, one of the starkest examples of the impact of dumping on poor African farmers. Meanwhile, developing countries are under increasing pressure to open up their own markets, even at the expense of their impoverished farmers.

Talks on industrial tariffs give even greater cause for concern, according to the report. Industries in many poor countries could be destroyed as a result of the current proposals. Developed countries have pushed hard to cut tariffs more in developing countries than rich ones - in direct contradiction of promises made in Doha to allow poor countries to do less.

In talks on services, rich countries are seeking to change the rules of the game halfway through. Rather than following the ‘opt-in’ method agreed in Doha, they are now calling for ‘benchmarking’ — a negotiated minimum commitment in terms of number of sectors and level of ambition — from all members, which could force premature liberalisation on poor countries.

Issues of importance to developing countries are being pushed aside. There has been little progress on agreeing details of promised ‘special and differential treatment’ for poor countries; new members are being forced to accept harsh conditions for membership; and pledges to help poor countries with the problems of implementing existing WTO agreements are far from adequate.

While rich countries have paid some attention to development issues such as ‘aid for trade’, trade facilitation, and preference erosion, Oxfam is concerned that they may try to use offers of a ‘development package’ to coerce developing countries to agree damaging concessions in other areas.

Bloomer: “For these talks to succeed, powerful countries, led by the EU and the USA, must keep the promises they made in Doha and put development at the heart of any agreement. Anything less would amount to a betrayal and a breach of the Doha declaration. The ball is squarely in the rich world’s court.”

The report concludes that what is on the table now would not promote development and could even do more harm than good. It warns that if the same level of intransigence continues, the talks could collapse, or decisions could be put off and negotiations extend into the next decade. The worst possible outcome, according to Oxfam, would be a bad deal that set in stone trade rules that impede development. Poor countries should not have to sign up to such a deal.

Unfortunately, the possible alternatives to a deal at the WTO are also unappealing for developing countries. Regional and bilateral trade deals with the EU and US pose even greater risks to development prospects.