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Posted on Sustainabilitank.info on July 29th, 2008
by Pincas Jawetz (pj@sustainabilitank.info)

WTO Talks Collapse: Was There Ever a Future for Bananas?
World Trade Organization (WTO) negotiations collapsed today, July 29, after nine days of intense negotiations. Trade ministers from approximately 35 countries struggled to salvage the stalled seven-year-old Doha round. Optimistic signs and compromises surfaced as a result of last weekend’s supposed breakthrough, but these were soon followed by stubborn accusations from a number of combative nations, including the United States, China, and India. Constructing a 153-country consensus now seems even more cumbersome and talks will not resume for at least two years. During this past week in Geneva, country officials worked particularly long hours in an attempt to come up with the necessary concessions, as well as extending their stay in Switzerland in hopes of returning home “successfully.” Such a dream was, unfortunately, not to be realized.

This latest round of trade talks was launched in the Qatar capital in November 2001, but has long been stalemated over issues of farm subsidies called for by the U.S., Japan and the EU, as well as tariffs on industrial goods imposed by the developing economies of Latin America and Asia. Proposed changes included EU and U.S. farm subsidy reductions of up to 80 percent. The compromise was that developing countries would open their markets to imports of manufactured goods, removing so-called “import shields.”

In the deal last weekend, Latin American banana producers and EU officials appeared to begin the process of putting to rest a quarter-century banana “war.” Many Latin American banana exporters had contended for years that the EU routinely gave preferential treatment to their former colonies in Africa, the Caribbean and the Pacific (ACP), and had kept import tariffs artificially high on the fruit that originates on mainland Latin America.

The complaint was originally filed by the U.S. because three of the largest banana producers in Latin America are U.S. multinational corporations. COHA repeatedly has argued in the past that U.S. banana companies, and not Latin American economies, are likely to benefit from the removal of the tariffs (see “Banana Wars Continue – Chiquita Once Again Tries to Work Its Omnipotent Will, Now Under New Management: Likely Big Losers Will Be CARICOM’s Windward Islands”). In addition to this contention, many view the present Doha round as an inappropriate forum for banana talk to occur in the first place, as any new arrangement could anger some of the ACP nations and thus would endanger the future of the round. Nonetheless, it is important for the banana conflict to be resolved so that Latin America, as well as U.S. corporations and English-speaking Caribbean exporters (who in most cases depend upon such exports for their economic survival), can see the benefits from the sale of their largest cash crop. Throughout the negotiations, it can be said that the U.S. was less than sensitive to the importance of a favorable outcome to such islands as Dominica, Grenada, and St. Lucia- a matter of sheer survival.



One of the main issues of contention amongst developing countries was the possible existence of Special Safeguard Mechanisms (SSM). This provision would enable countries like China and India to raise agricultural tariffs to protect their farmers in case of a surge in imports. Latin American countries rejected the SSM proposal, saying that it would be damaging to their export interests. Venezuelan Industry and Trade Minister William Antonio Contreras said that “we are not here to block an agreement, but to defend our interests and to fulfill the command of the round that is the one of developing.” The dispute over the existence of these mechanisms, designed to help only certain nations, largely contributed to the collapse of the talks.

It now should be clearer than ever as to why WTO talks have been at a stand still for so many years. It is not an enigma why it has been so difficult to achieve consensus with a myriad of players in the field with a lot to gain, but even more to lose. Lucrative deals for some nations can be devastating to others: WTO negotiations certainly have not proven to be a win-win game.

This analysis was prepared by COHA Research Associates Revaz Ardesher and Jessica Wayne
July 29th, 2008 COHA is the Washington Based Council on Hemispheric Affairs.

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WTO Talks Collapse Amidst Developing Countries’ Reluctance to Sacrifice Food Security.
Tuesday 29 July 2008

Opinion from – The Center for Economic and Policy Research.             {The Center for Economic and Policy Research is an independent, nonpartisan think tank that was established to promote democratic debate on the most important economic and social issues that affect people’s lives. CEPR’s Advisory Board of Economists includes Nobel Laureate economists Robert Solow and Joseph Stiglitz; Richard Freeman, professor of economics at Harvard University; and Eileen Appelbaum, professor and director of the Center for Women and Work at Rutgers University. }

Indian women farm laborers plant rice. India and other developing nations are reluctant to sacrifice food security measures during World Trade Organization negotiations.

  Last-minute attempt to push through a WTO expansion “deal” fails.
Washington, DC – Despite trade ministers’ hopes for a last-minute deal, World Trade Organization (WTO) negotiations collapsed yet again today, and observers at the talks in Geneva say that the failure is not surprising, given the reluctance of India and other developing nations to sacrifice food security measures in the wake of the recent global spike in food prices.
Given President Bush’s lame duck status, negotiators had been called to Geneva to try to push through a last-minute deal before Bush left office. Because negotiators need about six months after a deal on the major issues to complete the details of the agreement, this possibility has now evaporated.

“Given what’s been on the table, no deal is better than a bad deal. A Doha conclusion would have had major negative impacts for workers and farmers in developing countries. The tariff cuts demanded of developing countries would have caused massive job loss, and countries would have lost the ability to protect farmers from dumping, further impoverishing millions on the verge of survival,” said Deborah James, Director of International Programs for the Center for Economic and Policy Research, who has been observing the talks in Geneva.

  It is unclear why negotiations were proceeding, given the fact that the U.S. delegation does not have a mandate to conclude negotiations, as made clear by a letter from Senators Feingold and Byrd sent to President Bush last week. In addition, cuts in subsidies agreed to by the U.S. are also incompatible with the new U.S. Farm Bill passed by Congress, and over-riding a veto by President Bush.
Many developing nations not invited to participate in the exclusive “Green Room” meetings in Geneva this past week are likely to continue strong opposition to a deal in the midst of a global economic downturn and increasing concerns over food security.

  At a time when many countries are seeking to reduce dependence on troubled economies in the U.S. and Europe, and as fears of a global recession loom, many nations are questioning the development gains to be achieved from trade liberalization. The projected gains from the Doha Round offer developing countries very little in potential gains. According to World Bank modeling, developing country benefits would be just 16 percent of total world gains, or 0.16 per cent of GDP. This works out to less than a penny per day per capita in the developing world. Poverty reduction – which in itself would be very limited – would reach only 2.5 million people.[1] These projections do not include many of the costs of implementing the Doha Round, which UNCTAD estimates to be as much as four times the projected gains.
The Doha Round could also increase world prices for food.[2] Since most developing countries are net food importers, the recent increase in food prices has led some developing country governments to reconsider food security mechanisms such as tariffs and domestic subsidies, which the WTO seeks to reduce. A number of countries have also imposed restrictions on exports, in response to the food crisis.
“There just hasn’t been much to gain for developing countries in this round – or for that matter, the majority of people even in the rich countries,” said CEPR Co-Director and economist, Mark Weisbrot. “The attempts by the rich countries to reduce policy space for developing countries in manufacturing are widely seen as ‘kicking away the ladder’ that rich countries like the United States used when they were developing countries.
  “The whole process of subordinating national policy to special commercial interests – whether in agriculture, telecommunications, pharmaceuticals (one of the most powerful interests and gainers in the WTO), or the financial sector – has gone way too far. Growth and development in most countries has been hurt, and they are pushing back. In the United States, too, rising inequality and now an economic downturn have provoked a backlash.”


Throughout the negotiations, some developing nations promoted trade policies and objectives at odds with the Doha Round’s objectives of opening developing country markets, including commitments to food sovereignty and defending policy space for alternative forms of economic development.

In a written statement, Bolivian president Evo Morales said that, “The WTO negotiations have turned into a fight by developed countries to open markets in developing countries to favor their big companies.”
[1] Kevin P. Gallagher and Timothy A. Wise, “Back to the Drawing Board: No Basis for Concluding the Doha Round of Negotiations.” Research and Information System for Developing Countries Issue Brief. No. 36, April 2008.
[2] Sandra Polaski, “Winners and Losers: Impact of the Doha Round on Developing Countries.” Carnegie Endowment for International Peace, March 2006.
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www.SustainabiliTank.info does not accept that this was just about bananas – we just posted the case of the airline industry that would have come under the services end of the World Trade Agreement.

A WTO was supposed to balance global trade so that everyone has to get something out of this, but when those that have neither the money, nor the fuel, have to do something to benefit interests that are placed in position to hurt them even more – so better put up barriers to harming trade. For some this means close in your agriculture, but we just pointed at some that would be better off if they closed in their airtransport -this just as an example. So let us be blunt here – the US would be completely in its right now to put an extra “oil-cost-tax” on the National airlines of the oil-states. With an end to the running-around-Doha exercize there is no reason why the US should not do this to help its airlines.

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