Doha trade talks fan the flames of crisis

So governments are free to breach the agreement by acting prudentially, provided they don’t, in effect, breach the agreement. What counts as “prudential” is also left undefined, with financial service lobbyists now arguing for a narrow interpretation that would limit it to regulations concerning solvency and financial disclosure.

Australia, like a number of other countries has made significant commitments in the area of financial services. While Australia has left itself quite substantial policy space to prevent and respond to situations like the financial crisis, it’s not looking to offer the same to others. In 2006 10 countries, of which Australia was one, made a collective request for the fullest liberalisation for foreign service providers of financial services in around 21 countries. Australia is asking for countries to commit to removing restrictions on foreign ownership of financial services, something that it itself has preserved through protecting the “Four Pillars” banking policy, which prohibits the foreign takeover of Australia’s four biggest banks, and insulates Australia from risky foreign acquisitions.

Concluding the Doha Round will only exacerbate the already problematic scenario of financial services regulation. The G20 has called for stringent accounting regulation, yet more restrictions on what accounting regulation can be implemented, will automatically be imposed at the conclusion of the Doha Round. These new rules, which disgraced accounting firm Arthur Anderson helped draft, are already agreed and awaiting the conclusion of the negotiations.

Despite the reduced regulatory capacity that would come from a conclusion of the Doha Round, the renewed push is justified on the grounds that it would give “confidence” to businesses. It would show that governments aren’t going to go running around putting up tariffs or other protectionist measures. None ever said they would. Instead, governments from developing countries are being asked to ignore the negative impacts that a completed Doha will have on access to food, support for infant industry, climate change, and the regulatory space for responses to crises.

The focus on approving a deal would require them to give more concessions than the industrialised countries. This last ditch attempt to pressure developing countries to agree to the Round reeks of opportunism.

If Australia, the G20, and APEC, are serious about addressing this problem then they need to start looking beyond their neo-liberal economic text books. A response needs to extend beyond exclusive clubs to a more inclusive process, or as the UN General Assembly President called for, “a G192”. Nearly 3,000 individuals and organisations around the world joined together in response to the G20 summit, calling for a process that represents the global nature of the crisis.

The G20 is not the body that should be charged with steering the response to this crisis as, despite their responsibility for it, others will feel its impacts more; and they deserve just as loud a voice.

Completing the WTO Doha Round will ultimately cause more harm than good.

More government policy space is required not less, which is at odds with what is dictated under the GATS. The environmental and food crises have demonstrated clearly that the free market doesn’t work and if left to its own devices brings disaster. The financial crisis is only the latest in a long line of free market debacles.

It’s time for governments and people around the world to actually heed the signals that are being sent. A new economic relationship is needed at a local and global level. Concluding Doha would just leave us on the same path that we’ve been on, a path to more and more crises.