New WTO framework doesn’t add up to development

The World Trade Organization’s proposal today to forge an agreement on the Doha round is miles away from delivering a true development deal, says international agency Oxfam.

The new proposal has 760 pairs of brackets, indicating areas where WTO members are in dispute. The original draft of the “Seattle” proposal – which ended in collapse – had only 402 brackets. “The equivalent today is that each one of the WTO’s 149 members has five different problems with this offer. This is how far away we are from a deal,” said Celine Charveriat, head of Oxfam’s Make Trade Fair campaign.

WTO Ministers meet in Geneva next week (June 28) “and they’re expected to resolve 760 problems. It’s difficult to see this working,” Charveriat said.

Meanwhile, the EU and the US are reported to have made slight improvements on their previous offers. “This could be a positive sign of their commitment not to let this round collapse,” said Charveriat. “On the other hand, it could be part of the brinkmanship of negotiation.”

“This text shows we’re still a long way from the promised deal that would help lift millions of people out of poverty,” Charveriat said. “The EU and US have failed so far to seize the political initiative and this is reflected in the lack of any agreement in the text. The numbers and concepts are so vague that any deal could still easily be riddled with flaws and deeply unbalanced.”

On agricultural subsidies, it has been reported that the EU has offered to further cut the “ceiling” level of its most highly distorting farm payments and the US to squeeze an obscure loophole in its subsidy program. Oxfam believes, however, the EU could still use loopholes to increase its farm subsidies, while the US offer leaves the vast bulk of its farm subsidy regime intact.

On farm tariff cuts, the EU and the US may be inching closer to the 54% reduction level that has become a political football between the two, but a persistent gap remains. The US want deeper tariff cuts; the EU less. The EU also made concessions on the level of “sensitive products” it should be able to protect. “Poor countries won’t get much joy from this because the level of their tariff cuts remains unresolved and nothing has been mentioned about the number of “special products” that they can to protect,” she said.

Meanwhile, the US and EU say that developing countries must “pay for” these agriculture offers by making steep cuts in their industrial tariffs. This pressure will increase in the coming weeks. The text on industrial products has essentially been the same since 2003, and developing countries have consistently rejected it as being unbalanced. The EU proposal, for instance, would have some developing countries cutting their tariffs by 70% while rich countries would cut theirs by around 25%.

“These offers seem to bring the EU and the US closer together, but there is still a gap between them that might not be bridged this year. Most importantly, these offers are still far removed from what developing countries really need from this round,” Charveriat said.