Wednesday, November 27, 2013

India blamed for WTO impasse

India is being blamed for yet another failure to negotiate a new global trade deal.

World leaders were to meet in Bali next week to sign a deal that features harmonized customs procedures, but India is holding out for the right to continue food subsidies.

Roberto Azevedo, the secretary general of the World Trade Organization, says he doesn’t think a deal can be brokered next week.

Any deal needs unanimous support from the 159 nations that belong to the organization.

The current deal that emerged from the Uruguay Round of negotiations featured major changes for agriculture and food trading, especially the agreement to convert all trade barriers into tariffs.

That should have made it much easier to negotiate a reduction in trade barriers.

Poor countries did not fare well in the Uruguay Round because high tariffs remain to protect the farmers of Europe, North America and Japan, denying Third World countries and their farmers the opportunity to make money selling food into those markets.

There have been many studies to indicate that reducing the tariffs would do more to help poor countries than all of the aid programs offered to those people.

When this round of negotiations, called the Doha Round, began a dozen years ago, the emphasis was on reducing agriculture and food trade barriers to benefit poor nations.

However, as the negotiations dragged on, it was United States demands for access to countries’ financial services sectors and Third World countries, led by India, demands for access to industrial markets that resulted in one impasse after the other.

Michael Punke, who has been negotiating for the U.S., says a deal next week now appears unlikely.
He said other countries are likely to copy India’s tactic of holding out for a better deal on specific items, what he calls “hostage taking”, and things will become too complicated for a meeting of political leaders to sort through in such a short time.

The failure of the WTO negotiations has put Canada in a more difficult position, trying to negotiate trade deals with much bigger and more powerful blocks of wealthy nations such as the European Union and the Trans-Pacific Partnership group that includes the U.S., Japan, Australia and New Zealand.

The World Trade negotiations always held out the hope that the combined efforts of countries with medium and small-scale economies could pressure the powerful and wealthy nations to offer concessions.

The WTO needs to change the rules so thoroughly corrupt politicians, such as those running India, can no longer thwart necessary reforms that will benefit millions of impoverished people.