updated January 2009
The unprecedented rate of growth in international trade over the last 15 years has not been accompanied by a commensurate fall in extreme poverty. Revision of the rules of world trade, especially the rules for agriculture, could distribute its benefits more widely. However, the refusal of the US and EU to contemplate unconditional removal of their farm subsidies has caused the collapse of the so-called “Doha development agenda”. In promising to introduce social and environmental issues into trade negotiations, the Obama administration has added a new layer of complexity to the impasse …
… The Politics of Trade and Poverty
The political prospects of clearing this impasse in the interests of the LDCs are not good. The richer countries are now focused more intently on gaining access to markets in the successful developing countries such as Brazil and Malaysia – who in turn seek access to northern markets in agriculture. These new middle income countries have been able to organise themselves more effectively in WTO negotiations, the G20 group headed by Brazil being the most important.
An LDC Group has also formed but tends to be excluded as talks reach critical stages or deadlines, one of the reasons why the WTO is accused of being undemocratic. Whereas in the past the G20 were natural allies of the poorest countries, there is anxiety now that their export strength is becoming as much a threat to LDC domestic markets as the traditional colonial relationships.
In 2001 it seemed as though the LDCs might find an unlikely new champion in the shape of the WTO. Startled by the vehement protests of the anti-globalisation movement at the 1999 Seattle ministerial, the WTO decided to name a new of round of negotiations as the “Doha Development Agenda”, proclaiming priority for poverty reduction. The painful reality is that the WTO itself has no capacity to deliver pro-poverty strategies. Unusual in offering no formal mission statement, the WTO describes itself simply as “an organization for liberalizing trade”; it facilitates negotiations and enforces the rules.
In 2006 the Carnegie Endowment for International Peace published a damning report Winners and Losers which projected that the Doha proposals would generate a net loss for the poorest countries. For richer countries such an outcome is self-defeating; a 1% increase in Africa’s share of world trade would generate revenues of five times the current value of foreign aid to the continent. For the WTO, the outcome lends credibility to the longstanding demands of trade campaigners for its abolition. Fitful and unsuccessful attempts to revive the Doha talks have been made since their suspension in July 2006.
Fair Trade: … (full long text).
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