Just about everything that could go wrong has gone wrong in the run-up to the global trade talks that began yesterday in this Persian Gulf nation.
Now, the ministers from some 140 countries gathering here, in what the Bush administration considers a test of Washington's leadership in the war on terrorism, risk failing a second time to agree on an agenda for writing new rules governing global trade.
PHOTO: AP
Success at the talks "is within our grasp," said Robert Zoellick, the US trade representative, who has made this meeting the focus of his first 10 months in office. "But," he said, "there's lots of hard work to do if we're going to get there."
A setback could send shock waves through the recessionary global economy and imperil the umbrella WTO, which was created six years ago to expand trade and regulate conflicts.
With five days of bargaining scheduled, trade officials are still deadlocked on several core issues -- farm trade, anti-dumping rules and textiles -- that top the agenda for the poorest countries and split the industrialized nations.
Negotiators also have to resolve a few new and highly politicized disputes, such as whether patent rules deny affordable medicine to nations facing health crises.
Murphy's Law seems to have plagued the trade talks in recent years. Two years ago in Seattle -- the last time officials tried to initiate what they refer to as a new round of trade negotiations -- the attempt failed in spectacular fashion. It was a showcase not for free trade but for groups protesting globalization.
Protesters are few in this tiny, oil-rich emirate, the only nation to offer itself as a host after downtown Seattle was ransacked during the 1999 gathering. But after Sept. 11, a painful security headache arose as the threat of terrorism against a conspicuous gathering in the Middle East forced the US and most other nations to send only skeleton negotiating teams.
Hotels here are swarming with security agents carrying walkie-talkies.
On Wednesday, before most delegates had arrived, a gunman was killed after he opened fire on US and Qatari troops guarding an air base about 30km southwest of Doha that was being used by US military aircraft. Officials said there was no evidence connecting the attack to the meeting and called it an isolated incident.
Despite or perhaps even because of the terrorist threat, US President George W. Bush and Zoellick made the talks a test of leadership. They say a successful outcome would show that Osama bin Laden had not succeeded in disrupting an open and interconnected world. Zoellick called the talks a mission to "counter the revulsive destructionism of terrorism."
Also, the world's major economies are experiencing a downturn this year, the first time they have retreated in tandem since the oil shocks of the mid-1970s.
The World Bank predicts that trade among nations will increase at an anemic rate of 1 percent this year after soaring 12 percent last year.
Individual interests
Yet while the need to stimulate overall trade is pressing, major industrialized and poor nations are trying to dictate the terms of these talks in ways that suit their individual interests. Even the strongest supporters of a new round, the US and the EU, are prepared to walk away if the agenda impinges too much on powerful domestic groups.
After repeated rounds of trade liberalization since World War II, industrial tariffs have fallen to an average of 4 percent worldwide. That has left more contentious issues on the table, including several protectionist measures in the richest countries that mock those countries' rhetorical support for free trade.
The talks will put pressure on the US to loosen quotas and reduce high tariffs on textiles and clothing, for example, while agreeing to discuss its use of measures to protect against imports of steel and other goods that it contends are priced below production costs.
At the same time, the talks will collapse unless Europe and Japan are willing to discuss dismantling the elaborate protection they have long provided for their inefficient farming sectors.
"The issues are set up in such a way that all the key players can walk away from Doha with a trophy," said Jeffrey Schott, a trade expert at the Institute for International Economics in Washington. "But they are also set up so that everyone will have to be willing to give up something that's important to people back home."
All the major members among the 142 nations that make up the Geneva-based WTO will attend the session, which will also feature the formal entry of China into the organization.
No member is publicly opposing the idea of beginning broad trade negotiations, which would last at least three years and aim to liberalize and standardize the cross-border sale of anything from mangoes to mutual funds.
Most participants say they are cautiously optimistic that the ministers will endorse at least a modest agenda for negotiations. Determined to avoid the unscripted clashes at the bargaining table that doomed the Seattle talks, WTO officials have drafted a carefully worded 11-page text that they hope can form the basis of an agreement.
The impetus to conclude some agreement is strong because the implications of failure seem so great. Zoellick and other trade officials speak of the "bicycle theory" of trade -- the need to move forward to keep from falling down. That is especially relevant during economic malaise, when the political pressure to shield domestic industries increases.
Collective interest
But when trade experts argue that nations have a collective interest in backing a trade round, it is a little like saying that both the Yankees and the Diamondbacks want to do good things for baseball. They do, but they are better known for competing on the field.
The most divisive contest concerns issues that divide some rich and poor nations. Led by Brazil, Egypt, India and Malaysia, many developing countries argue that the trading system and the world trade group itself are slanted to advance the interests of industrialized countries. They say that any new round should be a "development round," focused mainly on the poor.
The World Bank supports the notion that trading rights are skewed toward the rich.
It argued in a report released last week that a new deal could raise incomes in developing countries by US$1.3 trillion over 10 years, but only if the Doha talks focused on agriculture, textiles and clothing, the main exports of the poor.
Murasoli Maran, India's trade minister, arrived in Doha on Wednesday pledging to block a new round unless the draft text was rewritten to address what he called the current imbalances in trade. Because the WTO operates by consensus, any member can veto an agreement.
India and Brazil, with support from some African nations, have also insisted on rewriting patent rules to allow a broad "public health" exception. They contend that existing protections benefit multinational drug companies by blocking cheaper generic versions of drugs to combat illnesses such as AIDS and malaria.
The issue turned red hot after the Bush administration forced Bayer to lower the price of its anthrax drug, Cipro. Health ministers in developing countries accused Washington of hypocrisy for insisting that poor nations honor patents while it bent the rules at home.
The Bush administration calls that nonsense. WTO regulations already allow nations to seize patents in times of crisis, officials in Washington say.
Along with Japan, Canada and Switzerland, the administration is fighting the idea of allowing a public health exception to patents, saying that any country could casually claim public health reasons for copying anything from cold medicine to dialysis machines.
They argue that India and Brazil are using the issue for mercantilist ends: both countries have large generic drug industries that want to export more medicines.
In an attempt to defuse the dispute, Zoellick has offered to exempt the poorest of the poor countries from patent rules on medicine.
North-south tensions are behind other sensitive issues in Doha, though most of the others also split the interests of the EU, Japan and the US.
By far the biggest benefit to the poor would come from loosening protections for farmers. World Bank officials estimate that Europe, Japan and the US together spend about US$1 billion a day subsidizing farmers, six times the total foreign aid to poor countries from all sources.
Though the US is a culprit -- its farmers get billions of dollars in annual subsidies and it restricts imports of sugar, peanuts and lemons -- it sides with developing countries against Europe and Japan, which protect their own farmers even more extensively.
The second-biggest benefit to poor countries would come from easier market access for low-end manufactured goods, notably textiles and clothing.
Here, the US is in the weakest position because it unabashedly shields its ailing but politically influential textile industry through quotas and tariffs.
Europe, which does less to protect such industries, has championed the push by developing countries for more market access. So far, the US has resisted.
Europe has also called for negotiations on environmental rules. It wants the WTO to allow it to ban imports -- such as genetically modified foods -- if it fears environmental damage. It is largely alone in making that case.
Japan, under siege because of its towering 1,000 percent tariffs on rice, has lined up developing countries for an assault on anti=dumping rules, which it says are routinely abused by the US to shelter steel makers and other industries.
The Bush administration is under heavy pressure not to compromise on this front. Seventy-five senators, led by Max Baucus of Montana, the chairman of the Senate Finance committee, wrote a letter to Zoellick defending anti-dumping measures as a vital tool to protect US workers against unfair trading practices.
Conflicts with Japan prompted Zoellick to lash out at Tokyo recently, saying that "the Japanese have just said no to everything in the process, and that just won't work."
Japanese officials seethed, responding that Zoellick was setting them up as fall guys if the Doha talks failed. As one Japanese trade officials commented, "We're his excuse."
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