When the whole global economy is teetering on the edge of collapse
the one hope for the future lay in the near-success of the Doha round
- which has occupied decades of world-wide negotiations, including
some dogged and well-thought-out initiatives from (my least favourite
politician !) Peter Mandelson.
So this collapse is grounds for deep pessimism.
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TELEGRAPH 30.7.08
1. LEADER - Lessons of Doha
In some ways, the remarkable thing about the Doha round of World
Trade Organisation (WTO) talks is not that they have collapsed, but
that they came as close as they did to success.
At the end of last week, some participants were putting the chance of
a deal as high as 75 per cent.
However, it was cruel timing that seven years of negotiations should
reach a climax when the world economy is stalling and food and oil
prices are soaring, all of which tends to fuel atavistic
protectionist tendencies (witness the way Senator Barack Obama so
successfully exploited them in his primary campaign).
The failure of the talks is economically disastrous and could be
politically destabilising. A deal could have been worth several
hundred billion dollars in increased global activity, a fillip that
national economies could use now.
Even more worrying, when nations fail to cooperate on trade, it makes
conflict more likely. There will be recrimination a-plenty in the
days ahead over who is to blame - India, the US and Brazil have all
been notably awkward. In reality, given the immense, multi-
dimensional complexity of the talks, there is little purpose to be
served in finger-pointing.
There are, however, lessons to be learned. This failure may signal
the end of multilateral trade agreements.
The WTO has started to resemble the United Nations - a bureaucratic,
slow-moving, heavily politicised organisation that finds agreement
difficult because of the hyperinflation in its membership - 153 at
the last count.
It looks increasingly like a last century solution to this century's
problems. The future is likely to lie in unilateral liberalisation by
countries who see free trade as being in their best economic
interests. China is already doing this on a startling scale. When it
pays off, as it will, others will follow.
=============AND --->
2. Doha world trade talks collapse in blow to globalisation
By Edmund Conway Economics Editor
The Doha round of world trade talks has collapsed in what one former
trade chief called the biggest blow to globalisation since the end of
the Cold War.
An emergency World Trade Organisation summit aimed at resuscitating
the seven-year long talks broke down in acrimony last night.
Negotiators warned that there was now little or no chance of
salvaging the talks, which promised to bring down trade tariffs, pull
millions out of poverty and keep food and goods prices under control.
It is the first time a major set of world trade talks has collapsed
entirely, and insiders warned that the consequences would be
comparatively weaker economic growth and a less globalised world in
the coming years.
Although the talks broke down at a summit in Cancun five years ago
and were later revived, officials warned that there was now "little
or no appetite" to return to the round.
Insiders said the talks had stumbled after the United States, China
and India failed to compromise on the size of their agricultural
tariffs.
After nine days of emergency talks in Geneva, WTO chief Pascal Lamy
broke the news to ministers from the seven biggest trading blocs that
the talks had failed.
At the centre of the dispute were so-called "safeguard clauses" which
allowed developing nations to slap emergency tariffs on imports if
they suddenly jumped to unmanageable levels.
US negotiators apparently balked at Indian and Chinese proposals to
trigger these safeguards on their cotton exports.
European Trade Commissioner Peter Mandelson said: "We have missed the
chance to seal the first global pact of a reshaped world order. We
would all have been winners from a Doha deal. Without one, we all lose."
Peter Sutherland, the chairman of BP, who as director general of the
WTO's predecessor, GATT, helped bring the previous trade talks - the
Uruguay round - back from the brink, said the collapse was "a disaster."
"This is deeply disturbing," he said. "Years of negotiation which
were and are important for globalisation have been sacrificed by this
failure. And there would appear to be no short-term fix."
"This is undoubtedly the biggest blow to globalisation since [it
gathered pace after] the fall of the Berlin Wall. It is a deliberate
and serious blow to multilateralism, and has raised further the
spectre of protectionism, which is always evident at a time of weak
economic growth and recession."
Negotiators will now discuss whether any of the progress made in the
seven years of discussions can be salvaged.
However, with the Presidential election in the US next year and a
change of European commissioners later this year, the consensus is
that there will be no meaningful opportunity to discuss trade until
at least after 2009.
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