"Unfinished Business" (International Herald Tribune, 12/10/2005)

The remark by the French statesman Georges Clemenceau that war is too important to be left to the generals could be applied to the Doha round of world trade talks as we approach next week’s Hong Kong ministerial meeting.

That was the reasoning behind the suggestion made last week by Brazil’s president, Luiz Inácio Lula da Silva, to Britain’s prime minister, Tony Blair: that a conference of world leaders be convened in order to give new impetus to WTO negotiations. The present deadlock in trade talks demands the vision and commitment that could perhaps only be achieved through the personal engagement of heads of state and government.

Fortunately trade is no longer cause for war, but it still affects the lives of millions of people and can be a matter of life and death, particularly in poor countries. International trade can be a fundamental tool for raising standards of living, improving income distribution and combating poverty and hunger. It can lead to the promotion of peace and security and even contribute to the fight against terrorism.

Almost 60 years ago, world leaders decided to include trade in the multilateral agenda. The creation of the General Agreement on Tariffs and Trade, and successive rounds of negotiation, led to an unprecedented liberalization in the international flow of industrial goods, which, in turn, became one of the main drivers of global economic growth. But this growth was uneven. Most notably, gains were very limited for poor countries that are heavily dependent  on agriculture.

The Doha development agenda was meant to address the unfinished business of the previous rounds, by correcting the ever-growing gap between rich and poor nations and the gap in the existing trade rules for industrial and agricultural goods. One gap compounds the other. The central idea behind the Doha agenda is to redress the development deficit in world trade, by allowing developing countries to benefit from their comparative advantages, most of all in agriculture.

The successful conclusion of the Doha round will depend on credible and courageous moves from all parties. Brazil is ready to do its part in the hopes that others will do the same. Together with our partners in South America’s Mercosur trade group, we have expressed our willingness to offer duty free and quota free access for products coming from least developed countries, especially from Africa and Latin America. The Group of 20 has tabled comprehensive, balanced proposals that are ambitious and realistic. Their legitimacy stems from the G-20’s diversity: large agricultural exporters, countries that rely on family agriculture and least developed countries.

The ball is now in the other court. The United States presented an important, although insufficient, offer in domestic support, which was not matched by the European Union response in market access. The logic of the negotiations requires that a more significant move be made in this area, in which the EU has a special responsibility.

The major economies, which are responsible for the greatest distortions in agricultural trade, must show the political will necessary to bridge the wide differences that still exist in the negotiations. They cannot expect more concessions in industrial goods and services from developing countries than what they are willing to offer in agriculture.

As Blair said, agriculture accounts for only 2 percent of employment in the richest countries. Furthermore, billions of dollars in subsidies, and other trade barriers in agriculture, benefit mostly a few  privileged individuals and companies in developed countries, to the detriment of their own consumers and of the farmers of poor nations worldwide.

The elimination of such distorting practices is essential for progress of developing countries and of the world economy as a whole. We cannot abandon the level of ambition of Doha and accept a trade round on the cheap. The world cannot wait another 20 years for a true reform of agricultural trade. That is why a bad agreement would be worse than no agreement.

Many of us had hoped to define the outline of our agreement in Hong Kong. At the very least, we should aim at a credible date for total elimination of export subsidies and equivalent forms of support. This now seems uncertain. But we have to continue our fight against subsidies and other trade-distorting practices for as long as it takes.

Two hundred years of social progress were unable to erase the last remnants of feudalism and other forms of privileges that still prevail in agricultural production and trade. This constitutes the real unfinished business we have to address.