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World Trade Talks Collapsed After 7 Years
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by tiha zaman | July 29, 2008 at 09:18 pm
682 views | 41 Recommendations | 23 comments
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There has always been a double edged sword in the fight for economic freedom.
And with the rise of China and India in power and economy, the US is finding it more difficult in making them heel and sing along to its once overpowering marching band.
GENEVA: 30th July 2008 -World trade talks collapsed here on Tuesday after seven years of on-again, off-again negotiations, in the latest sign of India's and China's growing might on the world stage and the decreasing ability of the United States to impose its will globally.
Pascal Lamy, director general of the World Trade Organization, could not bridge differences between a group of newly confident developing nations and established Western economic powers. In the end, too few of the real power brokers proved committed enough to make compromises necessary to deliver a deal.
Generally, domestic subsidies and tariffs on imports are more favourable to the producers and farmers than the same imposition on their export market. And for this, consumers would inevitable gain more than producers would lose.
The failure appeared to end, for the near term at least, any hopes of a global deal to further open markets, cut farm subsidies and strengthen the international trading system.
After nine consecutive days of high-level talks, discussions reached an impasse when the United States, India and China refused to compromise over measures to protect farmers in developing countries from greater liberalization of trade.
Despite this setback, world trade would resume but not necessarily under WTO but between individual countries abiding still to the current agreements. This heavy stone in the way dampens the hope of the smaller and poorer developing countries of having at least "sliver" penetration in the giant markets.
But it is a big setback, particularly to the hopes of smaller and poorer developing countries, which were counting on gaining greater access to consumers in the United States, Europe and Japan.
Deep skepticism about the advantages of free trade was on vivid display during the Democratic primaries and it is growing in Europe, particularly as France, Italy and other countries have fallen into an American-style economic malaise.
Countries like China and India, which have become more aggressive in advancing their interests.Like the United States and Europe, he said, China and India might find it more advantageous to negotiate bilateral agreements in which they can apply more pressure on a single trading partner.
And it was further reported that any faith to salvage in any remaining agreements would have to wait until after the US election for the new administration to take over.
Mari Elka Pangestu, the Indonesian trade minister, said the failure of the talks reflected the inability of the rich industrial powers to deal with the growing influence of China, India and Brazil in the global economy.
She complained that what she called "a reasonable request" had been blocked because the United States "is not going to show flexibility."
But in a world that is overwhelmed with giants of US, Brazil and China, is free trade more important than fair? But in the other hand, its infatile should government try to restrain the forces of globalization...
(The follow up to this story, Post Mortem: A Change in World Trade Process can be found here)
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tiha zaman
Kuala Lumpur, Malaysia
Most RecentMost Recommended Comments (23)
at 21:23 on July 29th, 2008
tiha zaman, I like this story. It's good stuff. Yes, It seems US is not having its way and US trade representative have already left the talk.
at 21:26 on July 29th, 2008
tiha zaman, I like this story. It's good stuff.
Very good point, Fair trade rather then free trade!
at 21:26 on July 29th, 2008
Thanks for the flag Sanjay. And yes, seems like US is not having its "day" everywhere they go. :)
at 21:29 on July 29th, 2008
Thanks Paschen!
at 21:30 on July 29th, 2008
A trade agreement with out China, Brazil, India, USA, GB and the other G8 member or G20 Members may be the way to go, once established the G8 will smarten up very fast!
at 21:37 on July 29th, 2008
Well G8 has never been popular for its total disregard of China, India and South Africa. I mean, outreach 5? That's pretty insulting..
at 22:09 on July 29th, 2008
well they are rather slow to learn, they used to be the G4, then the G7, now G8, eventually it will be the G12 and G20! Even if in a couple of years it becomes the G20 or at least the G12, it would still not be right to the rest of the World especially African Countries!
We need a real WTO that does not only take in to account all Countries and Nations, yet that is also democratic and would function with a majority rule such as 60% or 70% of the vote carry and still leave room for exceptional need or circumstances such as Haiti for instance.
A WTO that is based on Fair trade and functions in a similar manner then the EU does with help and assistance as well as very clear gide lines and very important a single united international currency!
at 22:15 on July 29th, 2008
tiha zaman, I like this story. It's good stuff.
at 22:16 on July 29th, 2008
tiha zaman, I like this story. It's good stuff.
at 22:32 on July 29th, 2008
Thanks for the GS flag you guys. Appreciate it.
at 23:28 on July 29th, 2008
tiha zaman, I like this story. It's good stuff.
at 00:01 on July 30th, 2008
Hi Caoimhin1, thanks for the mark!
at 01:44 on July 30th, 2008
It's ironic that we all agree: MAKE POVERTY HISTORY but then waste seven whole years each country fighting their corner over free trade, especially to aid developing countries (That was the initial aim of this Doha round) and then end up walking away. So much for doing something about poverty. Yet we also know that, in spite of Mandelson negotiating on behalf of the whole of Europe, Sarkozy would have undermined any agreement by sticking his heels in with his 'NON'. It shows how fickle the big nations are when it comes to freeing up trade. There is overwhelming that increased free trade between the developed and the developing world as well as breaking down the huge trade barriers between developing nations could have a major thrust to the world economy. Mandelson said that the differences were only small and should have been resolved. I'm not at sure what anyone means by 'fair' trade: who gets to decide who or what is fair. Please, not governments and please not NGOs! Both of them are useless at putting forward ideas that get unanimous support! So the best/worst thing we have is the market, with our ability to intervene at times to iron out the worst distortions!
at 02:23 on July 30th, 2008
Thanks for the comment greypopplestone,
And I agree that without clear rules about origin, member states with the lowest external tariffs will benefit most from a free trade as trade and production will be deflected in their favour. Logic would suggest that a free trade works best where the members have a similar pattern of external tariffs, or when they agree to substantial harmonization of tariffs to reduce differentials. And I think that's the key because we surely do not need governments or NGOs (as you said) to decide what "fair" is, but that WTO itself (to regain any credibility), should come up with that substantial harmonization either by coordination or synchronization of tariffs.Or at least living up to the hype that a free trade area as a prelim stage in the formulation of a full custom union.
at 03:06 on July 30th, 2008
Well said in deed, however what will happen without Government and the UNO as well as NGO's is that the hole thing will not result in fair trade but rather an even more savage Capitalism or rather a new form of feudalism. We need all members to go back to the negotiating table and make some big compromises. The only way to get fair trade in the long run is through a monetary union such as the Euro or the FCFA in west Africa, yet this has to b global. We need to start thinking long term rather then short term and plan ahead and build the foundations for tomorrow, that we our self may not even profit from, yet should we fail to do so, the next generations wound be better of rather worth!
The Stock exchange centres around the World have to be abolished or at least be reformed and regulated! We need to start thinking out side of our own borders and systems and think as one Humanity and one Global economy. Granted we are a long way from it, yet be better get started or more unrest and injustice will come our way and cause more genocide's and wars!
The first thing would be to reform the Building blocks such as the UNO, WTO, and the Armies!
at 03:41 on July 30th, 2008
Well said in deed, however what will happen without Government and the UNO as well as NGO's is that the hole thing will not result in fair trade but rather an even more savage Capitalism or rather a new form of feudalism.
Yeah, I could see it happening, if it already isn't doing so. We say it's all about benefiting people, but unless there is enough profit in the deal for the special friends of the leader we kill the deal.
When you talk about the US not having the muscle to shove the deal through, that doesn't surprise me either. Spoiled and greedy we can't manage to put aside our personals gain long enough to give in to the common good. Because we believe our "due" is always more and we need it now we will not as a people achieve anything great.
at 03:44 on July 30th, 2008
Aha, thanks Paschen and well noted.
But it is salutary to remember that over 30% of the world trade is conducted between multinational corporations (MNCs) and that the reformation many of us hope, is that the state-centrism of the WTO will need to change if it is to become truly an institution for the management of trade, rather than simply trade between states.
at 03:42 on July 30th, 2008
tiha zaman, I like this story. It's good stuff.
at 03:47 on July 30th, 2008
Thanks for the mark Mikasi and I agree, when US put some good thoughts in an effort - they really do come through (well...most of the time that is) :)
at 04:10 on July 30th, 2008
tiha zaman, I like this story. It's good stuff - great article
at 04:18 on July 30th, 2008
As mentioned, if multinationals don't see a viable market in a given region, then they're not interested in aiding development. They just don't follow the dictates of good statesmanship. Sadly, most nations don't, either, guided as they are by market forces.
at 04:24 on July 30th, 2008
Thanks jordan and mchawk.
at 08:51 on July 30th, 2008
And yet again the African countries who desperately need the attention and the advantage are left to scavenge for mercy scraps in economic trade. The agenda of cotton (most dissapointingly) wasnt even given the chance for discussion. Btw, the opinions posted by readers here are good.