The World Trade Organisation has a self-imposed deadline - the end of this month - to agree to the draft framework for negotiations mandated by the launch of the Doha development round. This should have been decided by the Cancun ministerial meeting in Mexico last year. That failure has cost the negotiations at least a year, maybe two. The round cannot possibly conclude this year, as had been planned.
But it will not fail; no trade round has ever failed, they just take too long. However, this time it is different. Multilateralism is giving way to regional and bilateral deals. Trade ministers will not sit still if negotiators in Geneva cannot make progress. It would be a tragedy for all if the talks remain stalled and we lose another three or four years. That puts in peril a system that has helped drive the most successful global economy in history. If I were a minister, I would cut regional deals wherever I could. National interests do not stand still. However, these deals create trade diversion, distortions, privileges for some, and I have yet to see a non-WTO deal that has an independent, credible disputes system or one that handles agriculture effectively.
China is negotiating with Asean, India and South Korea, and flirting with Japan. New Zealand hopes to conclude a deal with China next year. Europe is also marching eastwards. Open regional deals can be helpful, but the poor in Africa and the Caribbean are largely marginalised. The WTO was, in part, created to prevent the rise of potentially hostile trading blocs.
Agriculture is always the greatest hurdle, but it also provides the greatest opportunity to lift incomes of poor developing countries. Africa would get up to five times more from freeing up agriculture than from all the overseas aid from rich countries. Workers in developed countries pay up to US$30 a week more per family for their food and textiles because of subsidies. Rich countries spend $1 billion a day on food subsidies.
The chairman of the agriculture committee in Geneva is New Zealand ambassador Tim Groser. His paper on the next step forward attacks the promise at Doha to eventually eliminate export subsidies.
It hits the mark. I suspect that there will be a grumpy consensus to accept it as a basis for negotiation, which will allow work to continue. The WTO generally does the right thing, even if it does it the wrong way and the long way. However, in an organisation where everything must be done by consensus, it is always unpredictable.