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WTO - the state of play

Why have talks been suspended? What next for the WTO? What next for developing countries? What has CAFOD done up to this point and what will it do next?

Why have talks been suspended?

Blame for the suspension of world trade talks can be laid squarely at the door of the EU and US.

Any hopes for achieving an outcome beneficial to developing countries lie in tatters due to the failure of rich countries to put the longer term interests of developing countries and the global economy before the short-term and selfish interests of domestic lobby groups.

The suspension of negotiations came after talks on Sunday 23rd July failed to produce any narrowing of the differences between major players at the WTO.

In particular the US remained uncompromising in talks on agriculture - both in what it was prepared to give on subsidies and also on what it was asking for from developing countries, in opening their agricultural markets.

CAFOD is bitterly disappointed at the suspension of talks and doesn’t absolve the EU of blame. EU negotiators consistently put the needs of their own farmers and businesses above the needs of the poor.

They failed to reduce domestic farm subsidies sufficiently and tried to push a bad deal on developing countries.

CAFOD is saddened by the inability of the WTO to deliver on the original promises made at the start of the Doha ‘development’ round, when it was said that talks would be specifically geared to the interests of developing countries.

What next for the WTO?

It is important to note that talks are 'suspended' – they have not officially 'collapsed'. The progress made to date on the negotiation agenda is put on hold, it is not completely scrapped.

Pending the resumption of negotiations when the environment is right, talks could resume and the gains CAFOD has helped developing nations to make so far will remain as gains.

As the major obstacle in discussion before the suspension was the US government, much of the future of the WTO depends on whether the US is prepared to change its negotiating position.

The US negotiators are under pressure from influential farm lobbying groups ahead of mid-term elections in the country in November. It is possible that once these elections have passed, the US negotiators will be more willing to move.

However, the level of intransigence shown by the US suggests that it could be months or even years before WTO members are again willing to negotiate en bloc.

It is now accepted that negotiations at the WTO will not be concluded before the end of this year, which brings a disappointing curtain down on the window of opportunity that existed to fast-track any agreement through US Congress.

It is in mid-2007 that the 'trade promotion authority' (TPA) granted to the Bush Administration by US Congress, expires.

TPA means new trade policies do not have to pass through US Congress for amendment, without it any WTO agreement passing unamended through congress becomes far less likely.

What next for developing countries?

CAFOD is concerned that the suspension of multi-lateral negotiations at the WTO will lead strong, developed countries to engage poorer developing nations in harmful bilateral trade agreements.

Whereas an agreement at the WTO would have been between all member nations, bilateral trade agreements are made between just two sets of countries.

Any collective bargaining power held by groups of developing nations at the WTO will be lost as they stand alone and make deals with much richer countries in much stronger positions.

A good example of this is the bilateral negotiations – called Economic Partnership Agreements (EPAs) - currently being negotiated between the European Union and the African, Caribbean and Pacific group of countries (the ACP).

The EU expect both sets of countries to open up their markets equally (known as ‘reciprocity’) to open, ‘substantially all’ trade.

The problem is that developed and developing nations are not partners of equal strength. EPAs – and other bilateral agreements - could lead to free trade areas in which the poorest countries, their farmers, producers and companies compete openly with the richest countries, producers and companies – and their heavily subsidised farmers.

What has CAFOD done up to this point at the WTO and what will it do next?

In terms of lobbying, CAFOD has played an important role in working with developing countries to put forward proposals for ‘Special Products’ – which would allow poor countries to protect crops of importance to their poor people. It has given developing countries additional support in raising their profile effectively in negotiations.

CAFOD has played a major role in highlighting the technical arguments around why and how rich countries have failed to put development first - and provided evidence to both negotiators and the wider public to support this.

CAFOD has been part of a new alliance between NGOs and developing country negotiators that has helped put the fight for fairer trade rules at the top of the international agenda.

And CAFOD campaigners and supporters have helped create an atmosphere of public concern and interest that has been critical in persuading decision makers to take these issues seriously and allow us to scrutinise the behavior of our political representatives.

The future of the global trading system and developing countries place in it is still unclear.

CAFOD will be working to ensure that rich countries keep promises made at WTO negotiations and do not make their own agricultural subsidy regimes worse or back track on other promises.

We will also be looking to speak out against unfair trade negotiations happening at the bilateral level, particularly Economic Partnership Agreements between the EU and the African, Caribbean and Pacific group.