Collapse of WTO talks a missed opportunity

At a time when food and fuel prices are increasing dramatically, the global economic outlook is uncertain, and the world's poorest people are increasingly vulnerable, a decent trade deal would have given these people some certainty and given the world a chance to prevent worsening poverty.

Instead, the Doha trade round collapsed because of domestic territorialism. Prime Minister Kevin Rudd reputedly stayed up until 2am on the phone to try to rescue the talks.

“I am deeply, deeply, deeply disappointed,” the Prime Minister said, a sentiment echoed by the “disappointed” and exhausted Trade Minister Simon Crean.

The current round of negotiations, launched seven years ago in Doha, was meant to reform trade rules so as to benefit poor countries.

But the talks have lost their way as rich countries reverted to defending their vested interests, while putting developing countries under intense pressure to make concessions that have no place in a development round.

Not only were poor countries being asked to make real and risky concessions on industrial trade, they were simultaneously being denied the flexibility to defend the livelihoods of their small farmers or ensure food security.

It is outrageous to blame poor countries for the failure of the talks, as some have done. If the European Union and United States had made meaningful offers that lived up to their promises to reduce their massive agricultural subsidies, we might have seen progress.

Instead, they demanded harsh concessions from developing countries in exchange for largely illusory reforms and limited flexibilities.

Developing countries were perfectly right to hold their ground. They did achieve some gains in the last few hours of the talks, around flexibility to defend their small farmers. But the overall package was still very imbalanced, and would have involved them giving up much more than they would gain.

The Shadow Trade Minister, Ian Macfarlane, has said that the collapse “undermines the trading opportunities for Australian exporters” and that the government should give up on the multilateral Doha process and resort instead to bilateral trade deals with individual countries.

But this would disadvantage smaller and poorer countries even further and the government should steer away from this path. While larger countries like China or Chile can negotiate on equal terms with Australia, smaller under-resourced countries would find it very difficult.

Negotiating multiple bilateral agreements with each of their trading partners is not only difficult for poor countries, it also creates a “spaghetti bowl” of different rules and regulations that are very complex and expensive to administer. The WTO, for all its faults, is the only forum in which small countries can negotiate collectively, rather than alone, and which creates one set of rules for all.