Trade Talks Back on Track
When the 147 strong-willed members of the World Trade Organization can agree on an issue as difficult and meaty as getting rid of farm subsidies, that's a feat worth celebrating. And now, with just such a deal, an important stumbling block to future trade talks has been cleared.
Early Sunday morning in Geneva, and almost a year after talks that would have reduced barriers to world trade broke down in Cancún, Mexico, WTO member countries finally saw the wisdom of a unified approach to global growth and economic development.
Wealthy nations broke with a longstanding, largely protectionist stance, and agreed to eliminate subsidies on a host of agricultural products, including wheat, cotton, soybeans, and rice. They were hard decisions. For instance, US and European Union farm subsidies currently total $150 billion per year. For their part, poorer countries said they would work to reduce steep tariffs, import duties, and other trade barriers they had imposed on a range of products and services.
Developing countries recently had followed the lead of India and Brazil, which rightly maintained in the so-called Doha Round of free trade talks begun in 2001 that big subsidies give an unfair advantage to richer nations - letting them flood the world's markets with agricultural products and thus depressing poor countries' economies and people. After Sunday's deal was announced, EU trade chief Pascal Lamy went so far as to say, "Developing countries have managed to create a balance of power" within the WTO.
That's not to say the WTO's work is done. None of the agreement thus far is legally binding. And Sunday's results leave a huge amount of detail to be hammered out later, because negotiators fought to keep many of their commitments vague.
But the progress made in Geneva certainly paves the way for more free-trade achievements when WTO negotiations resume in September. And it's a strong signal of the world body's much-needed ability to effectively guide and enforce global trade.