Thursday, July 27, 2006

New York Times Editorial - Trade: Losers all around

New York Times Editorial - Trade: Losers all around
Copyright by The New York Times
Published: July 26, 2006

It's easy to shrug off this week's collapse of global trade talks. Amid the killing in Iraq and Lebanon, a war of words over "de minimis subsidies" and "amber box payments" seems arcane at best. But the damage to the world's poorest countries, which will now be denied promised access to global markets, will be enormous.

So will be the resentment toward the world's richest countries. And it should be. Most of that blame ought to be directed at Europe and the United States, which again decided the political clout of their farm lobbies outweighed their leaders' repeated promises to do more to end global poverty.

This round of trade talks, launched soon after the 2001 terrorist attacks, was supposed to redress decades of unfairness in the global trading system. Since World War II, global agreements have dismantled barriers against trade in industrial goods and services, the areas where the rich have a huge comparative advantage. But they have done little to break down barriers against trade in agricultural goods and textiles, an area where poor countries can compete if given a chance.

That was supposed to change this time around, with the Americans and Europeans promising to make deep cuts in agricultural subsidies and tariffs. Rich countries pour nearly $1 billion a day into propping up their farmers. That fuels overproduction, drives down prices, and makes it impossible for poor farmers to sell their unsubsidized products abroad or even at home.

Who bears the greatest fault for the talks' failure this week is hard to tell. But with the White House nervously contemplating this fall's Congressional elections and President Jacques Chirac of France, whose farmers are among the most cosseted in the world, nervously watching his polls as well, the agricultural lobbies on both sides of the Atlantic again carried the day.
Nothing good will come of this. The developed countries won't benefit from a further liberalization of trade in services and manufactured goods. The poor countries won't get to compete with their agricultural goods. And the world economy, which grows faster as free trade expands, may falter. As for the promises made in 2001 to do more to help the world's poor climb out of poverty, those have been shrugged off.

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