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Profits and livelihoods

After nine days of hard negotiations, which at one stage were seen heading towards an unprecedented breakthrough, the trade talks at Geneva collapsed leaving all those who champion multilateral trade deeply disappointed. There are bound to be serious, if still unclear, consequences from the breakdown. For now, the nearly 40 trade ministers who attended the “mini-ministerial” meeting would like to preserve the rather considerable progress made on a number of iss ues relating to such areas as agricultural trade and non-agricultural market access (NAMA). The Doha round launched in late 2001, soon after the terrorist strike in the United States, was a bold attempt at reviving the world economy. The Doha round is the first ever multilateral trade negotiation to have a development dimension. It was hoped that trade liberalisation, properly calibrated, would allow the poorer countries access to the markets of industrial countries. However, during the seven long years since its launch, the development aspects were often relegated to the background. The two subjects that have remained central right up to the latest ministerial meeting are agriculture and NAMA.

Commerce Minister Kamal Nath has attributed the failure to the fact that, while the developing countries including India and China were fighting to protect the livelihood of their farmers, the U.S. and other rich countries were trying to get the best commercial deal. The specific item on which the trade talks tripped, the special safeguards mechanism, has to do with the levels of tariffs that developing countries can maintain to shield their farm sector from unexpected surges in imports. The differences between the U.S. and Indian positions in this area proved irreconcilable. A WTO background paper suggests that there could have been a meeting ground if all the parties had the will and conviction to move forward. India has claimed success in certain other key areas. An anti-concentration clause that would have prevented developing countries from shielding entire sectors through tariff walls was successfully resisted. With the season for mutual recrimination just starting, some countries have attributed the failure to the fact that only a small group of countries, comprising Australia, Brazil, China, the European Union, India, Japan and the U.S., was involved in the discussions whose outcomes were expected to be binding on others. The recent talks showed that there are significant differences within the group of developing countries just as there are among the rich countries. It is a particularly bad time for the trade talks to fail. Creeping protectionism in the West, an imminent change of guard in the U.S., and general elections in India next year are some of the factors that will make it extremely difficult for the Doha round to be revived soon.

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