Tuesday, January 3, 2012

Has WTO failed the developing countries?

A critical piece highlights why the WTO has failed the developing countries and Least Developed Countries. It states,

"Here are 10 examples of how the WTO has failed the poor:
1. Cotton: the Fairtrade Foundation revealed last year how the $47bn in subsidies paid to rich-country producers in the past 10 years has created barriers for the 15 million cotton farmers across west Africa trying to trade their way out of poverty, and how 5 million of the world's poorest farming families have been forced out of business and into deeper poverty because of those subsidies.
2. Agricultural subsidies: beyond cotton, WTO members have failed even to agree how to reduce the huge subsidies paid to rich world farmers, whose overproduction continues to threaten the livelihoods of developing world farmers.
3. Trade agreements: the WTO has also failed to clarify the deliberately ambiguous rules on concluding trade agreements that allow the poorest countries to be manipulated by the rich states. In Africa, in negotiations with the EU, countries have been forced to eliminate tariffs on up to 90% of their trade because no clear rules exist to protect them.
4. Special treatment: the rules for developing countries, called "special and differential treatment" rules, were meant to be reviewed to make them more precise, effective and operational. But the WTO has failed to work through the 88 proposals that would fill the legal vacuum.
5. Medicine: the poorest in developing countries are unable to access affordable medicine because members have failed to clarify ambiguities between the need for governments to protect public health on one hand and on the other to protect the intellectual property rights of pharmaceutical companies.
6. Legal costs: the WTO pledged to improve access to its expensive and complex legal system, but has failed. In 15 years of dispute settlement under the WTO, 400 cases have been initiated. No African country has acted as a complainant and only one least developed country has ever filed a claim.
7. Protectionist economic policies: one of the WTO's five core functions agreed at its inception in 1995 was to achieve more coherence in global economic policy-making. Yet the WTO failed to curb the speedy increase in the number of protectionist measures applied by G20 countries in response to the global economic crisis over the past two years – despite G20 leaders' repeated affirmations of their "unwavering" commitment to resist all forms of protectionist measures.
8. Natural disaster: the WTO fails to alleviate suffering when it has the opportunity to do so. In the case of natural disaster, the membership will have taken almost two years to agree and implement temporary trade concessions for Pakistan, where severe flooding displaced 20 million people in 2010 and caused $10bn of damage. Those measures, according to the International Centre for Trade and Sustainable Development, would have boosted Pakistan's exports to the EU by at least €100m this year.
9. Decision-making: the WTO makes most of its decisions by consensus – and achieving consensus between 153 countries is nearly impossible. But this shows another failure of the WTO: to break the link between market size and political weight that would give small and poor countries a voice in the trade negotiations.
10. Fair trade: 10 years after the start of the Doha Development Round, governments have failed to make trade fair. As long as small and poor countries remain without a voice, the role of campaigning organisations, such as Traidcraft and Fairtrade Foundation, which are working together to eliminate cotton subsidies, will remain critical.
The WTO has failed to live up to its promises over the past decade, which reveals a wider systemic problem in the global community. True and lasting solutions to global economic problems can only come when the model of global competitiveness between countries becomes one of genuine cooperation."
While many of the issues raised might be debatable, they raise issues that the multilateral trading system as well as all member countries need to address to make the system more responsive to the needs of the developing world.

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