A successful outcome to the WTO trade talks is still possible.
I am in contact with leaders and officials both from the world’s most developed nations and from developing countries. When the Doha Development Round talks collapsed in July, I was struck by the gap between what officials say when they meet at the OECD in Paris and how they define their positions in the WTO talks in Geneva.
The Doha Development Agenda is an opportunity to re-balance trade rules in favour of developing countries while boosting the world economy. The Doha talks reportedly collapsed largely because of disagreements over agriculture, but clearly that is not the whole story. Indeed, some rich countries were not ready to accept larger tariff cuts or bigger reductions in trade- distorting domestic subsidies for farm products. Emerging market countries, meanwhile, offered what some saw as only modest improvements in market access for goods and services.
The present impasse is a lose-lose situation, in which all countries suffer but where the poorest will suffer most. The OECD has estimated at nearly $100 billion the gains in terms of increased economic activity – and hence prosperity – that could be obtained from full tariff liberalisation for industrial and agricultural goods. The benefits from liberalising trade in services – the fastest growing sector of the world economy - could be five times higher, at around $500 billion. A Doha agreement on trade facilitation, by clearing away procedural barriers, could contribute at least $100 billion more. Developing countries are projected to reap as much as two-thirds of these gain
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