Letter to the editor from AFTINET

Original Publication Date: 
28 January, 2007

Your editorial is mistaken in its claim that there must be "more ambitious" offers from developing countries on goods and services in the WTO trade negotiations.

Reports of breakthroughs in the WTO talks will come to nothing unless the United States, European Union and Australian Governments recognise the specific needs of developing countries and the negative impacts of deregulation of essential services.

Calls by the US and EU for developing countries to make further concessions are hypocritical while they have still not offered meaningful reductions in their own unfair agricultural export subsidies. The US and EU are not likely to reduce their subsidies as elections loom.

They are still failing to acknowledge the specific situations of developing countries. Studies by former World Bank chief economist Joseph Stiglitz and many others show that rapid tariff reductions in low income economies with high unemployment simply worsens poverty and unemployment.

Developing countries have rightly rejected such proposals, and have also rejected WTO proposals to reduce the right of governments to regulate essential services like water and enable such regulation to be challenged under trade rules.

Under WTO rules, developing countries have the right to special and differential treatment to ensure they can manage their development process. They are right to reject proposals that would increase unemployment and reduce access by the poorest to essential services.

Trade Minister Warren Truss is also calling for developing countries to make "more ambitious" offers in services and goods. Moreover, the Australian government sponsored extreme proposals to reduce the right of governments to regulate essential services, which may be on the table again if talks resume.

These proposals would not only affect developing countries, but would also reduce the right of state and local governments to regulate services in Australia.

The Australian government should cease making unreasonable demands on developing countries and instead work with them to implement the special and differential treatment promised in the so-called development round of WTO negotiations. It should also withdraw support for proposals to reduce governments' right to regulate services which would have negative impacts in Australia and elsewhere.

published in the Australian Financial Review, January 29 2007