Celebrating Failure

The Central government is busy congratulating itself for being instrumental in the failure of the WTO trade talks in the Mexican resort of Cancum. India, Brazil and China along with Malaysia and others resisted pressure from the developed countries to agree to trade terms disadvantageous to the developing countries.

With India, Brazil and China in the lead, 80 developing countries joined together to resist formidable pressure to accept unfavourable terms of trade and unlimited rights of advanced  countries to invest in the developing countries where cheap labour and higher rate of growth attract investment from developed countries.

Since the Uruguay round of talks ten years ago (which led to the establishment of WTO) developing countries have been demanding that the US and European Union curtail their agricultural subsidies which makes it easier for Western farmers to produce and sell in the international market at a lower price than agricultural products from developing countries. This has a devastating impact on developing countries’ farmers.

The EU and US over the last 10 years increased farm subsidies instead of cutting down. The EU-US subsidies have gone up to $300 billion from $180 billion. This is certainly not the way to reduce and eliminate subsidies.

 However, the main cause of failure of the talks was not farm subsidies but what are referred to as a “Singapore issues”. These issues are thus called because in ministerial talks at Singapore in 1996 proposals were made to incorporate rules regarding foreign investment, competition, government purchases and procedures like custom clearance into WTO.

 Developing countries did not want to discuss these issues while the developed countries insisted on it. Celebrating the failure to come up with an agreement at Cancum may not be the right approach to WTO. In any case, the advanced countries would try to have similar agreements with developing countries individually.

 It must be kept in mind that we can to some extent “celebrate” our success in resisting pressure from the developed world, but a long impasse in trade talks would not help anyone.g   

MOhd. Zeyaul HAque