Setting the record straight: Oxfam is not walking away from WTO talks

Jeremy Hobbs, Executive Director of Oxfam International, writes to correct the impression conveyed by some press reports last week that the organization has turned its back on world trade talks. "Oxfam released a report last week entitled A Recipe for Disaster. In it we warned that the chances of a trade deal being done this year that helps developing countries are looking increasingly slim. Minimal offers on agriculture from the developed countries coupled with their aggressive demands on NAMA and services mean that a WTO deal along these lines, would hurt rather than help poor countries."

1 May 2006 – Jeremy Hobbs, Executive Director of Oxfam International, writes to correct the impression conveyed by some press reports last week that the organization has turned its back on world trade talks.

It is extremely disappointing to arrive at this conclusion. Oxfam has long been campaigning for reform of trade rules to help poor countries. When the Doha Development Agenda was launched in 2001 we welcomed the stated intention to put the needs of poor countries first and we did not celebrate the collapse of the Ministerial in Cancun but criticized the developed countries for their brinkmanship and intransigence. We want a new trade deal to be agreed that helps reduce poverty.

But as the deadlines have come and gone, the development content of the Doha talks has diminished and poor countries’ needs have been sidelined. We are worried that as the pressure grows to complete a deal before the US Trade Promotion Authority (TPA) expires in 2007, the chances of a bad agreement far outweigh those of one that genuinely helps poor countries. For this reason we are now saying that in the absence of substantial improvement in the offers from the EU and US, taking longer to agree to a good deal is preferable to finalizing a bad deal within the current timelines.

However, we are not saying that no deal should be done or calling for an end to the negotiations. Contrary to some misleading headlines in newspapers last week, Oxfam has not turned its back on the WTO. We still believe a new set of multilateral trade rules is badly needed and we still think the WTO is the best place for them to be negotiated. Indeed, we are calling for a renewed commitment from all countries to the Doha Development Round and to the promise to “place [developing countries’] needs and interests at the heart of the Work Program”.

We understand that missing near-term political deadlines could mean that the Doha Round stretches on for 3 or 4 more years, perhaps more. If a deal is not agreed by the end of July there will not be time to implement reforms before TPA expires. And without TPA, it will be almost impossible to agree a new set of global trade rules. There has been talk of renewing or extending the authority: US negotiator, Ambassador Portman has been pushing for this in the last few months, but it is far from guaranteed.

A slow round is far from ideal. It will delay much needed reforms and poor farmers will continue to suffer from dumping and other effects of unfair trade rules. It may also mean that the EU and US turn their attention to the aggressive pursuit of regional and bilateral trade deals as an alternative way to get access to developing countries’ markets. None of this is desirable from a development perspective.

However, for all its risks, a slow round would be better than a bad deal that would lock in potentially devastating changes and could actually make poor countries worse off. Some observers suggest that by refusing to sign a deal this year, developing countries risk jettisoning the small gains they have made so far in the Doha round such as an end date for export subsidies and increased market access for LDCs. This is true, but it is also the case that they are likely to have to pay dearly for these minimal concessions.

Oxfam’s analysis shows that what is being demanded in the areas of non-agricultural-market access and services is far from balanced by the minimal gains in agriculture and the so-called development package. Without the promised special and differential treatment in all pillars of the talks, poor countries stand to lose more than they gain from a new trade deal.

To be acceptable, any new trade deal must include deeper cuts to rich countries’ trade-distorting agricultural subsidies and better market access offers, with no unreasonable demands for reciprocation. Developing countries must have the right to regulate, to preserve policy space, and to sequence liberalization in a way that serves development objectives.

Unreasonable demands on NAMA and services must be removed and the principles of special and differential treatment and less than full reciprocity must be observed throughout all pillars. Poor countries also need adequate aid for trade that is not linked to market opening; patent laws that ensure access to affordable medicines; and action to address preference erosion.

Without all of the above, the Doha Development Agenda will not be worthy of its name.

Ultimately the primary obstacle is political will. If rich countries were serious about delivering a development round they could easily make it happen. If the EU and US stopped pointing fingers at each other and at the so-called advanced developing countries, they could rescue the development agenda and unlock the round. But as long as they continue to play a game of brinkmanship and tit-for-tat a pro-development outcome will remain elusive.

Oxfam will continue to follow the process and to campaign for a better result that delivers puts the needs of developing countries first. Our ‘Big Noise’ petition to make trade fair has more than 18 million names on it and is growing. Because of these people and the many others affected by unfair trade rules, we will not walk away but will continue to fight for fairer trade rules. Calling the bluff of those that what is on offer will boost development is just part of that fight.