Post-Mortem : A Change in World Trade Process

by tiha zaman | August 1, 2008 at 01:12 am

530 views | 24 Recommendations | 9 comments

This is a follow up story and I'll just cover this briefly for those who followed the news on the collapse of global trade talks after 7 years of negotiations since the Doha round in 2001.

GENEVA: 1st August 2008 - Some blamed soybeans. Others blamed cotton, while many believe U.S. election year politics to be the real culprit. Whatever the truth, the collapse of global trade talks has left diplomats asking why Washington, which often made concessions to lubricate previous deals, refused to budge this time.

On Wednesday, the autopsy of what went wrong began amid bitter recrimination. But there was a growing consensus on one point: that global trade negotiations cannot go on like this.

Without going into the whole blame game and pointing fingers, many are questioning whether the real reason behind the failure of the talks was because many countries try to push on an issue to a head while letting other problems remained unsolved.

The system of all-or-nothing had Pascal Lamy, the director general of WTO to reflect back on how the method of negotiations played a key role in the collapse of the talk. The defence put forward was that:

During the marathon talks, Lamy tried his best to accommodate the array of interests that needed to be satisfied. WTO rules stipulate that every country has a veto and nothing is agreed until everything is agreed.

The idea Lamy says was to architect a forum that includes China, India and Brazil in a 7 strong group of countries that brockered a draft text.

But this style of negotiation contracted a major kink in the gear when instead of a group of 7 countries agreeing it developed a dispute between the 4 major continents fighting for different settlements.

This traditional negotiating alliances were fractured: India, China and Indonesia were on one side, Brazil, Argentina and Paraguay another. The United States won no support from Europe. Developed and developing nations were at odds.

Question is, why were the issues negotiated as if they were of "one big deal" instead of settling on a smaller scale, allowing agreements in individual trade sectors which could definitely avoid an issue to be blocked by one or 2 disagreeing countries.

This would involve a change to the WTO's fundamental principle, the so-called single undertaking, in which a deal is negotiated as a package and everything must be accepted by all 153 members.

Lamy proposed (in which I agree but with some doubts) that WTO should consider the ideas of groups of countries negotiating in blocs.

In addition, the proposals tendered would be drafted by neutral experts rather than by countries (which inevitably had resulted in them drawing up plan to suit their own national trading interests).

Joe Guinan, a trade expert with the German Marshall Fund, a public policy group, said the failure of the talks illustrated an unavoidable need for change.

"The fact that such an arcane issue could bring seven years of negotiation to an end shows that this is a straightjacket that needs to be loosened," he said.

Joe, I couldn't have said it better.

(Previous story on collapse of WTO talk can be found here)

0 See all footage | View Slideshow

Share: email story | add to any | | facebook | stumbleupon

recommend Sign In or Join to post comments

Uwe Paschen

flagged this story as Good Stuff

at 02:03 on August 1st, 2008

tiha zaman, I like this story. It's good stuff.

"This is the end, my Friend!...." The old son of doors would fit in here rather well!

With some Wagner Music and Helicopters flying into the sun set!

tiha zaman

at 02:23 on August 1st, 2008

And there goes my dream for cheaper cotton shirts... (muses Tiha while watching the helicopter disappears). and by the way, thanks for the mark Paschen.

gerrypopplestone

flagged this story as Good Stuff

at 03:39 on August 1st, 2008

tiha zaman, I like this story. It's good stuff. But one of the problems to any bilateral agreements is that they are often negotiated bewtween a weaker developing country and a more powerful developed country. For instance the US cotton subsidies that are so cruelly strangling the West African cotton growers need to be negotiated in the glare of publicity to ensure the US is honest about how it goes about it. There is a huge amount of m,oney at stake!

tiha zaman

at 04:00 on August 1st, 2008

Thanks gerrypopplestone btw I agree with you on this and that was the most sensitive issue concerning the fall out of the talks. Not just the US but also China and India as well, since they're bigger than sasquatch, none of the normal developing countries even dare to raise their clubs. Ergo, Africa's issue of cotton wasnt even discussed.

Jordan Yerman

flagged this story as Good Stuff

at 04:37 on August 1st, 2008

tiha zaman, I like this story. It's good stuff.

yopgi-one (not verified)

at 08:15 on August 1st, 2008

Absolutely equal consensus sounds like a great goal, but it is not achievable.

If you have any familiarity or experience with the consensus process, you know it can take a great deal of time and negotiating to get 15 parties to come to a unanimous position, let alone 153.

I like the idea of regional blocks better. That way, each region can decide what are it's most crucial agenda items, then bring them to the table. Then there should be a give-and-take bargaining process. Then final ratification should be by supermajority (60% or 2/3) not absolute consensus.

No one country should be able to veto proposals, but countries, or regions could be allowed to stand down if they have no interest in an issue. If one country or region does not like a proposal, they have to participate by casting a vote against.

The result will be that each country starts with a "wish list" of their agenda. This becomes modified to where each region can then bring its "regional agenda" to the overall table. Each region should then be prepared to compromise on some issues in order to get gains on other issues.

It ain't perfect, but it keeps everyone in the game with stakes in the process, and moves the WTO towards being a body that reflects a sincere attempt to make progress on the world's most pressing issues.

Hopefully, the WTO can move forward in ways which the UN has become stuck. The antiquated Security Council structure, with its ineffective veto procedure, allows countries to hang important agenda at the UN, and block progess.

Since the Security Council countries don't want to revise the veto rules, and one country such as the USA or China can thwart the whole UN, then we need a new world body that doesn't have these same stuck procedural areas.

tiha zaman

at 08:42 on August 1st, 2008

Great comment I must applaud.

Im not saying I disagree with the new proposition of negotiation process, I said i have my doubts on it. And you're right even getting 15 parties consenting on an issue is almost Herculean let alone 153 countries. And that is where the doubt lies, because primarily regional blocs would connote contiguity which could be confusing in the issue of "proximity".

However if the idea of regional blocs is based upon homogeneity, then there would a possibility of consensus groupings. And this social homogeneity may be perhaps defined as involving socio-cultural factors (my opinion) which can contribute to a sense of "regionalism".

Only then can regions achieve agreements in an issue rather than thinking what's-in-it-for-my country-only, (as you said because it's a "regional-agenda").

And as for the rest of the comment, I'm of the same page as you that UN will always be stuck in it 5-veto nightmare/gift-from-paradise (depending on which school of thought you're rooting for) but a new body with the same support as UN is almost realistically impossible in present and the near future.