WTO, the eternal dispute

Article published on Dec. 12, 2005
community published
Article published on Dec. 12, 2005

This article has not been vetted by an editor at Paris HQ

Despite the World Trade Organisation’s aim to liberalise world trade, its efforts have been paralysed by the conflict between developing and industrialised countries.

The World Trade Organisation (WTO) was born on 1 January 1995, replacing its predecessor, the General Agreement on Tariffs and Trade (GATT), which came into effect in 1948. Like GATT, the WTO concerns itself with achieving world trade liberalisation through the dismantling of trade barriers. The WTO is a special organisation of the United Nations, currently uniting 149 countries, of which two thirds are developing countries. The topmost decision-making body is the Ministerial Conference, which has to meet at least once every two years.

Agricultural policy has always been a fundamental issue for the WTO. Since its creation, it has been agreed that existing measures, such as subsidies, for the protection of agriculture must be converted into tariffs. These in turn are to be abolished step by step, an endeavour the EU is determined to block. The EU’s expenditures under the Common Agricultural Policy (CAP) account for nearly half of the whole EU budget. Special agreements on the import of agricultural goods into the EU and privileged access for certain countries only exist under the framework of the Cotonou Agreement with the African, Caribbean and Pacific Group of States (ACP). However, trade liberalisation for agricultural products discriminates against one group in particular: the developing countries.

Seattle 1999: the mobilising of globalisation critics

The Ministerial Conference of Seattle in November 1999, dubbed the ‘Millennium Round’ of the WTO, focused on agricultural policy and services. Despite the EU’s good intentions, revealed in its proposal for world trade liberalisation and increased integration of developing countries into the WTO, negotiations failed. Above all, the developing countries lacked the funds and resources, as well as the support from the USA, necessary to put forward their demands. The EU’s refusal to abolish agricultural subsidisation further complicated matters.

The Seattle conference is probably best remembered for the ‘Battle of Seattle’, during which, non-governmental organisations (NGOs) and at least 30,000 protesters demonstrated against world trade liberalisation. The anti-globalisation movement was born. Before the Ministerial Conference had even begun, the globalisation critics, despite their somewhat different standpoints, all identified the WTO as a common enemy. Among other things, they criticised the obvious neglect of environmental protection and labour standards as well as low wages; a consequence of progressive liberalisation. The functioning of the WTO was a further thorn in the globalisation opponent’s side as many of them viewed the WTO as an exclusive and undemocratic club.

Doha 2001: an agenda for developing countries

The year 2001 saw further attempts to resume negotiations, this time in Doha, Qatar. In order to give priority to the concerns of developing countries, it was officially agreed to focus specifically on development issues by proclaiming a new round of negotiations called the Doha Development Agenda. Above all, the developed countries wanted to push the so-called ‘Singapore Issues’ onto the agenda, which were incorporated into the WTO’s programme in 1996. These included investment, competition and trade facilitation. The group of 70, consisting of representatives of the developing countries, is fundamentally opposed to the Singapore Issues because they are not focused on agricultural matters.

There is further dispute over the way in which the abolishment of subsidies for exported agricultural goods should take place. The Cairns Group, a coalition comprising 17 countries, produces more than 20 per cent of the world’s agricultural goods. These countries are supporting a phasing out of agricultural subsidisation. On the other hand, the EU argues that the particular position held by agriculture within industry calls for special treatment. However, for many developing countries this stance represents pure protectionism.

Cancun 2003: break out of the North-South conflict

The 2003 Cancun conference was to advance deadlocked negotiations. Again, globalisation opponents, headed by poor farmers and agricultural labourers, manifested their aversion to the WTO. The protests culminated in the suicide of Lee Kyoung Hae, a South Korean farmer. Eventually, the conference was aborted, much to the satisfaction of the WTO opponents. Many NGOs saw this as an achievement for the poorer countries, which had more effectively organised themselves into groups, fending off the influence of the richer states.

The failure of Cancun reveals the extent of the rich-poor divide. Both sides are consistently blocking one another: the US and the EU insist on focusing on the Singapore Issues, whilst the developing countries mainly want to push the Doha Development Agenda. Whether or not the Ministerial Conference taking place from 13 to 18 December in Hong Kong can resolve this conflict remains to be seen.