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Gone for now, but please do not forget about Doha

Is there any hope of reviving Doha’s aim to liberalize trade in agricultural products?

Economic globalization has many enemies, yet the sorts of changes that we have seen in recent years are helping to pull people out of absolute poverty, especially in Asia, and not just in India and China, at a faster rate than at any time in recorded history. Globalization is still a partial phenomenon: there is no open market in international labor and there are still many restricted markets in agricultural products. Given the sheer significance of agriculture in the developing world, changes in the way in which international trade is conducted in agricultural products are capable of having a huge impact on rural living standards in such countries. Multilateral trade negotiations are the basis for trade expansion in the post-World War II world, assisted by the most-favored nation clause. Such negotiations are not easy. Agriculture in many countries is a highly protected sector. There are vested interests with respect to agricultural outputs and to farm inputs, not only in the European Union but in the United States and it would seem also India. If developed market economies (DMEs) and those that live in them are serious about raising the living standards of poor rural people in the developing countries, domestic change in DMEs is essential.

The suspension of the Doha talks at the end of July was described by the Economist newspaper as ‘senseless and shortsighted’. At the end of June the Vienna Summit Declaration looked as if it was sending a message to the Doha negotiators (see the weblog ‘Don’t forget about Doha’) reinforcing the significance of Doha and of freer trade in agricultural produce. By the end of July, the Economist was reporting the suspension of the talks. If the Vienna Summit did send a message, the negotiators (the ‘trade ministers’ mentioned in the Declaration) were not listening. The Economist fears that the break down is in fact a challenge to the whole idea of multilateralism in trade negotiations.

A significant opportunity to liberalize trade in agriculture and to shake up high-priced domestic producers in DMEs has been missed. The aim may well have been unrealistic but it was worth pursuing. There is no great popular constituency for agricultural change in DMEs. Doha’s suspension grabbed no headlines. Its possible outcomes in improving, through time, the lot of the rural people in the developing world are hard for the popular imagination to grasp. Those with a potential interest see the WTO as an organization without legitimacy. The Doha Round has been in trouble before. There does not appear to be a date set for the resumption of the talks. Who cares?