Critics Say Doha Talks Not Likely To Help Developing Nations

Original Publication Date: 
7 December, 2005

Two key critics of the World Trade Organization said today they do not believe the Doha round of negotiations is moving toward an agreement that would help most developing countries.

But they added that they believe there will be more important behind-the-scenes negotiations at the meeting of trade ministers in Hong Kong next week than trade officials have been suggesting in recent weeks.

Martin Khor, director of the Third World Network, an organization of citizens' groups in developing countries, said he expects substantive negotiations on agriculture to be delayed until March and the Hong Kong meeting to concentrate on manufacturing and particularly on services such as banking and telecommunications.

"In Hong Kong, the bigger fight will be over services," Khorr said in a telephone briefing from Geneva.

Lori Wallach, director of Public Citizen's Global Trade Watch, said she also expects announcements on agreements on "aid for trade" programs.

But she said the proposed programs are so small that developing countries would lose more if they agree to the tariff cuts and other concessions the developed countries want than they would gain from the aid packages.

The ministers from the developed countries "need to spin something," said Wallach.

She said that many of the proposals are for loans and that developing country officials have begun to call them "debt for trade" instead of "aid for trade" and are making it clear they want grants if they are to accept the proposals.

Khorr also said West African countries are insistent that their objections to U.S. cotton subsidies be addressed with trade proposals, not aid.

Khorr said a proposed 10 percent cap on industrial tariffs would require many developing countries to cut their tariffs by as much as 50 percent to 90 percent.
Tariff cuts of that size would make it impossible for their small industries to compete with imported goods from the United States, Europe and China, he added.
Khorr acknowledged that consumers in developing countries would benefit from the cheaper prices of imported manufactured goods, but he maintained those benefits would last only a couple years because so many local manufacturing jobs would be eliminated.

At that point, he said, a Doha agreement would not work for the developed countries either, because unemployed workers in the Third World would not be able to afford those imports.

The European Union, he said, is pushing hard for the developing countries to agree in Hong Kong to liberalize services such as banking, insurance and telecommunications.

European negotiators have told developing country officials that the agreement would also make it possible for their service companies to set up businesses in the developed countries, but Khorr said that most of the developing countries do not have enough professionally trained people or retail chains to compete with Wal-Mart.

Khorr said E.U. and U.S. negotiators "have launched new negotiating methods" that would force the developing countries to enter into negotiations on services if the United States or the European Union wants them to, rather than leaving them free to decide whether to participate, as they have in the past.