In terms of achievement, last week's ministerial
meeting of the World Trade Organization here earned a low, though
not failing, grade. But for symbolism, it rated a high mark.
The developing world
received little of what it was supposed to get when the so-called
Doha "development round" of negotiations was begun four years ago.
But Hong Kong proved for the first time that much of the developing
world is now more committed to the principle of trade liberalization
than the developed world is. Progress may have been minuscule, yet
developing countries proved major players in the negotiations. By
being seen as very much a part of the process rather than mere
recipients of whatever is determined by the United States, the
European Union and other old rich countries, they have in very broad
terms acquired a commitment to the principles of the WTO -
multilateralism and the benefits of lower trade barriers.
For that, much credit
must go to Brazil and India for a firm but ultimately pragmatic
stance on behalf of both the G-20 - which includes China, India,
Brazil, South Africa, Mexico and others - and the bigger, very
diverse G-90 group of developing nations. It matters symbolically
that India and Brazil, whose national interests are quite different
and which have traditionally have been relatively minor players in
trade are now so engaged in the process.
China has also played an
important role - by remaining almost invisible on its own soil.
China's export potential may be feared by many developing countries
as much as by the old industrialized ones, but it both kept a quiet
solidarity with developing-country farm exporters and provided an
example of the benefits of lower tariffs on industrial goods for
East Asian nations as a
whole played a limited role in Hong Kong - unfortunate, given that
they above all have been beneficiaries of freer trade and a
multilateral system. Their stance reflected illusions that regional
and bilateral pacts can be a substitute for the WTO, as well as the
farm protectionist follies of Japan, South Korea and Taiwan.
Indeed, the thuggery by
protesting Korean farmers outside the conference mirrored that on
the part of the European Union inside. The Union is simply unwilling
to acknowledge that if it wants to be a global power, it must play
by global rules, and not try to force the world to bend to the
results of self-serving anticompetitive horse-trading in Brussels.
Eventually agreeing to
an end date - 2013 - for ending farm export subsidies was a modest
concession with a distant time line. The dots linking Europe's
support for its inefficient farmers and its problems with slow
growth and urban decay were clear enough to others. Annoyance with a
self-righteous Europe desperate to maintain the unequal privileges
of a bygone era was the meeting's background music.
The European Union's
inability to negotiate anything that had not already been stitched
up between Paris and Berlin enabled the United States to get off
lightly. The Americans gave only a modest concession to the African
cotton farmers who are being impoverished by U.S. subsidies and
blocked duty-free garment access for some of the poorest countries
like Bangladesh and Cambodia.
It remains to be seen
whether negotiators can build on the progress so far and reach a
conclusion to the Doha round. Normally one might expect ministers to
see the forest despite the trees, and to use their political
authority to reach agreements beyond the powers of negotiators in
Geneva. In this case however, now that some of the headline issues
are out of the way, the best chance may be that the ministers will
quietly allow their Geneva (and Brussels) negotiators to use the
fine print and arcane technical details to put some liberalizing
flesh on the bare bones of Hong Kong.
It is now clear that the
developing countries will be more flexible on non-agricultural
market access and services, the issues of greatest interest to the
developed world. India, Brazil and China all have interests in a
deal. So too should Europe and the United States - but only if they
can escape being ruled by sectional interests. If they looked at how
far China, India and Brazil have all come over the past decade by
confronting entrenched domestic interests, they might awaken to the
Hong Kong has probably
done just enough to halt, for now, the trend toward regional and
bilateral trade deals that promise much but deliver confusion and
trade discrimination. The follow-through in 2006 will be doubly
difficult given the size of the U.S. trade deficit and the abysmal
demographics that rule Europe and Japan. But just possibly, they
will see the cost of sacrificing the interests of their advanced
industrial and service sectors to the tyranny of influential