Is the Doha round delivering on poverty?

Scepticism marked discussions at a just-ended global poverty summit in Johannesburg on whether the Doha Development Round of negotiations at the World Trade Organization could help reduce the number of poor people in developing countries.

The Doha talks, which began in 2001, are aimed at reducing barriers to market access throughout the world, with the development of poor countries at the heart of their agenda. They look at three main sectors - agriculture, intellectual property and services.

Jomo Kwame Sundaram, the assistant secretary-general of the UN Department of Economic and Social Affairs and a leading Malaysian economist, said it had been extremely difficult to measure any socio-economic benefits of such access.

He said studies in his country had shown that a paddy farmer’s child had better nutrition than the children of a rubber farmer who now had access to global markets.

Improving income levels did not automatically imply better lives for the poor in any country, as other factors such as the implementation of policies that benefit the poor within countries matter a lot more, said Joseph Stiglitz, Nobel prize-winning economist and chair of the Brooks World Poverty Institute, the organizers of the Johannesburg summit.

He cited the USA as an example of where gross domestic product had grown substantially but not filtered down to the poor, who were worse off than a decade ago. "It [high economic growth levels] had a trickle-up effect," said Stiglitz.

Subsidies

...a paddy farmer’s child had better nutrition than the children of a rubber farmer who now had access to global markets

Over the past decade the Doha talks have failed to get developed countries to stop subsidizing their farmers and agricultural exports, something that directly threatens livelihoods and food security in the developing countries.

While some European Union (EU) countries have abolished or reduced agricultural subsidies, the USA has not. It reintroduced subsidies for cotton farmers in 2008, pointed out Bernard Hoekman, an international trade expert at the World Bank, severely affecting cotton farmers in West African countries like Benin, Mali, Chad and Burkina Faso.

The Johannesburg summit called for the rapid elimination of export subsidies, especially for cotton, sugar, groundnuts, dairy products and fish.

Sundaram said sub-Saharan Africa did not stand to benefit from the Doha talks. He pointed out that many least developed countries (LDCs), most of them in Africa, lacked the capacity to compete in the global market.

Experts at the Johannesburg summit said Bangladesh and Cambodia were among the few LDCs to build a competitive edge - in their textile and clothing sectors.

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Not much benefit in preferential trade agreement

LDCs are seeking duty and quota-free (DFQF) access to markets in developed countries at the Doha talks. “In practice, many advanced and emerging market economies have agreed to allow DFQF market access for LDC products under at least 97 percent of tariff lines. While the difference between 97 percent and 100 percent may seem insignificant, many LDCs export so few product categories that even a small number of exclusions can sharply limit the benefits of trade preference programs,” says the International Monetary Fund. 

The Johannesburg summit called for the setting up of an annual reporting mechanism on DFQF.

Fishing

The Doha talks are also discussing EU fishing industry subsidies which encourage European fishing beyond Europe - something that adversely affects the millions of African fishermen, said the World Bank's Hoekman. "If those subsidies are removed it will prevent overfishing, benefiting the poor fishing communities along the African coast and the environment."

The Johannesburg summit also called for improvements in the General Agreement on Trade in Services (GATS) to ease restrictions on labour mobility from LDCs in order to boost such sectors as health, education and call centres.

Not all doom

The Doha talks have made progress in some areas, for instance Trade-Related Aspects of Intellectual Property Rights (TRIPS), which provides minimum standards for intellectual property protection in sectors such as music and medicine, and led to the introduction of greater flexibility in the manufacture of drugs for public health services.

Also under Doha, the EU was forced to abolish preferential access to banana exporters in African, Caribbean and Pacific (ACP) countries - benefiting LDCs which have preferential access under the EU's Everything But Arms regulation, said Hoekman.

The Johannesburg summit warned, however, that “the length of time that the [Doha] negotiations have taken threatens to render aspects of the agenda obsolete."

But now is the time to push for a conclusion on outstanding issues, said Hoekman, as the US Farm Bill, which covers agriculture subsidies and food aid, comes up for review in 2012.

jk/cb