How Doha Failed The World's Poor, Again

Anyone who’s been following the Doha round at the World Trade Organization (even if that someone’s only been following casually–and really who could take it full-time?) cannot even pretend to be surprised that yet again the trade talks have faltered.

After all, these talks, which were supposed to define the development agenda of the WTO, have been going, going, going, but not quite gone, almost since they started seven years ago. Two years ago, a previous last-ditch attempt at reaching “modalities” (trade-speak for agreements among the 150-odd member countries on ways to move forward) failed in Geneva (see my column from summer 2006).

Yesterday, renewed talks in Geneva failed after India—a newish power in the developing country camp—squashed the negotiations on agriculture (which are linked to negotiations on services and manufactured goods) when it refused to give in on its demand for significant “emergency” powers to prevent a flood of cheap food imports damaging its farming sector. India’s chief negotiator, Kamal Nath, claimed to have the support of dozens of other developing countries in standing firm on such “special security measures,” or SSMs, against demands to water them down from the United States.

Much chatter out there seems to be about whether this spells the end of the Doha round. (If you want to hear WTO director general Pascal Lamy’s inimitably dry take on the collapse, check this out.) I attended the Hong Kong ministerial meeting back in December 2005, and my sense (for what it’s worth) is that it ain’t over till it’s over. They’ll talk again, and will creep towards a resolution. The question is, will any resolution even matter by the time they get around to one?

I’m not going to get into the obvious merits of free trade in agriculture, services and goods here. I’ve done it before ad nauseam, as have many people who are smarter than me. (For instance, see Andrew Coyne’s recent post at macleans.ca, which lists some of Canada’s more egregious transgressions against the free trade cause.)

Let’s just for the moment point out some ironies. For one, what’s the logic of defending a farming community against cheap food imports, all in the name of food security, in a nation that cannot feed its people? According to the UN World Food Programme, India is home to nearly half of the world’s hungry; more than a third of the population consumes less than 80% of minimum energy requirements—a threshold below which the WFP considers people to be, ironically, “food-insecure.”

On the other hand, what’s the logic of going to the wall over what is, from the U.S. point of view, clearly a minor point of principle, when so much else is at stake in terms of opening up important markets to American goods and services? It makes no sense—unless, as a cynic might charge, the point is to maintain the politically expedient but economically appalling level of farm support in the States, as embodied in the most recent U.S. Farm Bill?

The convenient myth among politicos and some trade-watchers is that Doha doesn’t matter, that it’s just a bunch of bureaucratic polyannas getting together to discuss how many modalities can dance in a blue box. But the inconvenient reality is that real people (consumers here, the poor around the world) pay dearly for the protectionism that keeps free trade an elusive dream—and the Doha round always having to come back from the dead.

Comments

[User 235907:]

The logic is simple. It's the cheap food imports that are destroying the livelihood of the farming community. If there are no imports, there will be increased farming and there will be buyers for the local produce. Instead of importing cheap food and feeding them, let them produce and the rest will be taken care of automatically! What they need is support to farming and modernization of farming sector.

2008 Aug 01 02:21 AM

[samij:]

i'm not sure about the case of india, but i think in general underdeveloped / emerging market the threat is other way around, the food in those markets are cheaper than it is in the industrialized world and thus free trade would increase the exports as well as the price of the food on local markets, thus making the poverty and hunger worse.

of course on the balancing side there's new opportunities created in agriculture in these economies. the outcome as a whole is probably going to be positive for everybody, but with problematic transition phase and, as mentioned in the blog entry, we're talking about feeding people with lives on the threshold as it is, so causes actions are called for as well as mechanisms that can be used in case of emergency.

2008 Aug 01 05:11 AM

[andyn:]

When farmers in India are committing suicide (est more than 10K in last 3 years) due to failed crops and/or insufficient prices, India cannot afford to open up the market to efficient western exports.
Maybe open trade is good over the long term.
But remember these negotiations are done mostly by politicians who have to answer to the "short term" livelihood needs of their constituents.
What the west can do is make sure the poorer countries have the support and infrastructure to be more on a playing field and have the confidence to open up their markets.
This is by no means over but I think there is no point in killing the poor just so that the west rich get richer.

2008 Aug 01 08:53 AM

[Jason Rines...:]

The bingo point here:

"Maybe open trade is good over the long term.
But remember these negotiations are done mostly by politicians who have to answer to the "short term" livelihood needs of their constituents.
What the west can do is make sure the poorer countries have the support and infrastructure to be more on a playing field and have the confidence to open up their markets.
This is by no means over but I think there is no point in killing the poor just so that the west rich get richer."

But this is happening with horrid leadership answering to lobbyists in the USA as well. This winter, there will be casualties as the poor (and even the lower middle class) choose between $4.50 heating oil and paying for prescription drugs.

2008 Aug 01 12:21 PM

[notsosmart:]

who ever cared about the poor?not too many.

2008 Aug 01 04:40 PM

[Jason Rines...:]

True about poor, but poor in this country receives many, many subsidies. And trickle down economics, top trickles to middle and middle to poor. In almost any failed state is the destruction of the middle class. They are too rich to allow fleecing and too poor to receive subsidies. They revolt either at the voting booth of physically.

2008 Aug 01 04:53 PM