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Poor Nations Put Premium on WTO's Survival

By Paul Blustein
Washington Post Staff Writer
Tuesday, August 3, 2004; Page A14

GENEVA -- This time, there were no raised-fist salutes from trade ministers parading before TV cameras and remarkably little bombast about the tyranny of the wealthy. Instead, last week's global trade meeting ended with a series of mutually congratulatory news conferences, following agreement on a framework for advancing the World Trade Organization's Doha Round of negotiations.

The contrast could hardly have been starker with the WTO meeting last September in Cancun, Mexico, which broke down amid recriminations between rich and poor nations. And although explanations for last week's outcome are myriad, one factor probably accounts for the accord better than any other: the fear that a second consecutive failure would permanently cripple the WTO.

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In the end, for all the fierceness of their differences over issues such as farm subsidies and tariffs on manufactured goods, the representatives of the WTO's 147 member countries stepped to the brink and saw that the abyss into which they might plunge was deeper and scarier than the leap they had taken in Cancun. Many fretted that the Doha Round, and conceivably the trade body itself, might not be able to withstand another Cancun-style blow.

Those concerns were particularly strong among developing countries, including some of the same Latin American, African and Asian nations that had celebrated their defiant stance at Cancun as a triumph over the arrogance of the United States and the European Union. Despite complaints that Washington and Brussels use their clout to tilt the terms of global trade in their own favor, developing countries are keenly aware that the WTO system protects the interests of poor lands, especially small ones, much better than if world trade were governed by regional blocs or by the equivalent of the law of the jungle.

The organization's director-general, Supachai Panitchpakdi, "made so many declarations that if this [Geneva meeting] fails, it's the end of everything in the WTO, and those messages are heard very loudly," said Celine Charveriat, head of the Geneva office of the aid agency Oxfam International, who was working closely with many of the poor-country delegations. "Right or wrong, those arguments were very important."

The WTO and its predecessor institution, the General Agreement on Tariffs and Trade, were designed to secure at least basic rights for poor and weak nations. WTO rules are arrived at by consensus, rather than votes weighted by economic power as at the International Monetary Fund and World Bank. Small members can -- and sometimes do -- file complaints against mighty powers for breaking the rules, and win judgments forcing bigger countries to change their offending conduct. One of the organization's fundamental principles is that member nations are not allowed to discriminate against the firms or products of other members (an important exception being for national security reasons, the justification the United States cites for its embargo of Cuba).

So although Charveriat, along with other advocates for the poor, was critical of the Geneva pact as providing too little to the developing world, she acknowledged that Third World governments had potent reasons for wanting to keep the WTO alive and well.

Partly that is because, with decisions requiring consensus, a single country may be able to obtain concessions by holding out against a broad deal. Moreover, worldwide negotiations offer the only opportunity for obtaining large-scale reductions in the billions of dollars in subsidies that the United States, European Union and other rich countries give their farmers. Farm subsidies often lead to gluts of supply and depressed world prices for crops, impoverishing farmers in developing countries, so reducing or eliminating them is a key goal of nations such as Brazil and South Africa in the Doha Round.

"Even if developing countries think the WTO needs radical reform," Charveriat said, "they know they have greater leverage in the WTO than in bilateral agreements," such as the proposed free-trade deal between the United States and Central American nations or the E.U.'s pending arrangement with South America. "They also know that subsidies are never on the table in bilateral agreements," because neither Washington nor the European Union, the two biggest subsidizers, will agree to slash their payments to farmers unless the other is doing so at the same time.

The desire to shore up the WTO was not the only reason for agreement in Geneva. One significant factor was the signal sent earlier this year by both the United States and the E.U. that they were prepared to be more forthcoming if other countries were willing to deal as well.

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