Blood on the floor

How the rich countries have squeezed development out of the WTO Doha negotiations

Four years on, the Doha Round looks increasingly unlikely to deliver on its promises to the world’s poor. Rich countries have sidelined development concerns and insisted on, among other conditions, the “blood on the floor” rule, i.e. obtaining economically painful concessions from all countries, including poor ones. In agriculture, trade rules look set to remain stacked against developing countries and poor farmers. Talks on industrial tariffs could jeopardise the industries of poor countries. If the rich countries fail to significantly improve their offer at the WTO ministerial meeting in Hong Kong in December 2005, developing countries should not be expected to sign on to a bad deal.

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Summary

As the world’s trade ministers head for the Hong Kong ministerial meeting in December 2005, the future of the WTO hangs on a knife-edge. The right decisions in Hong Kong could help transform the multilateral trading system into a genuine force for development. The wrong decisions could destroy progress already achieved in 2005 on aid and debt relief. The Doha Development Round is a litmus test. If it fails to create trade rules that work for the poor as well as the rich, it will confirm that the global economy will act as an engine of further polarisation and insecurity in the world. The power to decide lies squarely with the rich countries.

Today, for every $100 generated by world exports, $97 goes to the high- and middle-income countries, and only $3 goes to low-income countries. This needs to change. Developing countries need more employment and business economic opportunities, and better export opportunities including exports, under fairer competition. They also need to be able to increase supply capacity and improve their competitiveness by strengthening infant industries, protecting vulnerable sectors, and receiving increased aid.

However, since Doha, negotiations have squeezed out such development concerns. Negotiators revealed as much when they stated that in order to sell any final deal to legislators, they had to be able to show that “pain should be shared” between developed and developing countries. Although this sentiment may reflect the reality faced by negotiators, such politics turn upside-down the promises made in Doha. Consequently, the Doha Round is now on course to benefit businesses in rich countries at the expense of the poorest countries.

Date of publication: December 2005