Political Cortex: Brain Food for the Body Politic

One part of the story that's most definitely true from any side: the United States and Europe refused to cut farm subsidies.  Despite the fact that in both areas, most of these subsidies go to large corporations, both parties propped each other up, allowing them to point across the Atlantic at the "bad guys" keeping agriculture off the table.  It was never a matter of developing countries opening up to take high-tech gear from the developed world.  The truth was there was nothing developing nations could have put on the table that would have gotten the US to drop those billion dollar rice programs.  Nothing.  And that will definitely have consequences in Africa and in other places where agricultural goods are the only sizable exports.

The talks, which could take months or years to resume, were launched in 2001 and had been aimed at easing poverty and boosting the global economy -- important goals for African countries whose agricultural exports remain largely sidelined by high farm subsidies in the developed world.  "Agriculture has been at the center of the negotiations, and that was the key to any possible progress," South Africa's chief trade negotiator Xavier Carim said.

But beyond the simple fact that neither the US nor Europe was interested enough in the developing world to cut their ridiculous subsidies, there are plenty of folks out there who are none too upset about the failure of the Doha round.

The collapse.. of the Doha Round of World Trade Organization negotiations in Geneva is one of the best things to happen to the developing world in a long while.

What?  But Doha was a "growth round," dedicated to that ol' tide that raises all the boats.  Wasn't it?

The idea that the Doha Round is a "development round" could not be farther from the truth.  At the very outset of the Doha negotiations in November 2001, the developed-country governments rejected the demand of the majority of countries that the talks focus on the hard task of implementing past commitments and avoid initiating a new round of trade liberalization. From the very start, the aim of the developed countries was to push for greater market openings from the developing countries while making minimal concessions on their part. Invoking development was simply a cynical ploy to make the process less unpalatable.

From the start of the Doha round, developing nations were focused on trying to make the developed world follow the rules they had already agreed to in previous talks.  The developed world was having none of that.  Why follow the rules when you have all the apparatus of enforcement on your side?  In fact, the Doha round called for eliminating protections for real small, family farms in developing countries -- many of them barely larger than subsistence farms, while continuing to protect large agriculture in developed nations.  Not exactly a deal that thrilled many countries.  It was one of many.

The developed countries want not only radically reduced agricultural tariffs from developing countries. They also want maximum entry to southern markets for their industrial and other non-agricultural goods. ... they have demanded that the industrializing economies of the South cut their non-agricultural tariffs by 60-70 percent while offering to cut theirs by only 20-30 percent.

The change would have been enough to all but extinguish developing industries in some nations, while doing little to lower barriers into developed markets.  

The South African government reflected the frustrations of most of the global South about the Doha process when it stated that "developing countries will not agree to destroy their domestic industry on the basis of unreasonable and irrational demands placed on them by the developed countries."

But doesn't the failure of this round represent a huge blow to developing economies?  After all, US coverage has often focused on how this trade agreement would help "the poorest countries."

Even the most pro-liberalization agencies are now admitting that the benefits of the Doha Round to the poor have been greatly inflated. According to a fall 2005 study by the World Bank, in a "likely Doha scenario" of reforms, developing countries would gain a mere $16 billion in ten years. That's a miniscule 0.16 percent of developing-country gross domestic product, or less than a penny a day per capita. The poorest billion people are projected to increase incomes by a mere $2 per year. That's why it is so heartbreaking to see "the poor" being invoked to sell the project of massive corporate expansion of the Doha agenda.

Why won't the poor benefit?  Once again, because the developing nations have nothing to sell but agricultural products.  And as long as the US and Europe play the game of pointing at each other instead of removing subsidies, there's little possibility for real improvement.

Advocacy groups criticized both the EU and the U.S. for spending more time fighting one another and less time concentrating on the needs of poorer countries.
"You could give this four weeks, four months, four years or four centuries. It doesn't make a difference," said Matt Grainger, spokesman for international aid agency Oxfam. "The U.S. and the EU refuse to accept that they have to cut their agricultural support."