Monday, July 16, 2007

Latest attempts to finalize Doha Round faltering

Business Day (Johannesburg)— “Action Call on Doha Trade Round Logjam”
Reuters (—“U.S. says Doha risks being delayed several years”
AP (Lisbon)—“EU, Brazil try to relaunch Doha trade talks”

Since 2001, members of the World Trade Organization (WTO) have tried—and failed—to finalize a multilateral agreement on trade that has come to be called the Doha Round.

Currently nations are again negotiating over the Doha Round, with WTO officials asserting that if an agreement cannot be reached by mid-August, it will likely be another three years—or more—before a fruitful conclusion can be reached.

Reports indicate that the main difficulty in reaching accord is disagreement between the wealth countries of the north (e.g., United States, the countries of the European Union), and the poorer, developing countries of the south, led by India and Brazil. Observers have focused on ongoing talks between the Group of Four (Brazil, EU, India, and the US). Reports have been mixed on how these talks are progressing. On the one hand, the EU and Brazil appear to have come to an understanding, while the US continues to criticize Brazil for being inflexible on some issues.

Among the biggest concerns is agriculture. In particular, wealthy nations like the United States heavily subsidize the agricultural sector, which puts farmers in the developing world at a distinct disadvantage as subsidies keep the price of certain domestic commodities, such as corn, artificially low. Interestingly, the US has already been called to task before the WTO by other countries for this anti-competitive practice.

On the other hand, developing nations—perhaps understandably—are resistant to opening up their markets to heavily subsidized agricultural products from the north, fearing a complete shutdown of their own agricultural sector.


Do you think wealthy countries will be willing to reduce or eliminate agricultural subsidies in the name of free trade?

Is the provision of massive and anti-competitive subsidies antithetical to free trade?

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