Global economy has outgrown Doha round, WTO meet told

Global economy has outgrown Doha round, WTO meet told

Geneva: The Doha round, begun eight years ago and still mired in negotiation, was criticized on Tuesday as inadequate to address the world’s current challenges ranging from market failures to global warming.

A report released on the second day of the World Trade Organization’s ministerial meeting in Geneva also said poor countries stand to gain little from the global free trade pact which was meant to help them find new markets for their exports.

"World trade and the world economy have changed profoundly since 2001," the Washington-based International Food Policy Research Institute found, noting in particular the emergence of Brazil, India and China as economic and trading powers.

Sharp swings in commodities and staple food markets were not factored in to the original Doha agenda, and climate change is treated only on the margins of the talks, which focus on cutting tariffs and subsidies on traded goods like cars and meat.

The IFPRI study calculated that the proposals on the table in Geneva would have a negligible impact on the state of the global economy, improving world real income by only 0.09% - about $70 billion - as an annual gain.

"Overall, global exports will increase by 2%," it said, warning that the poorer countries who have suffered most in the financial crisis and downturn would gain little from a global deal that WTO chief Pascal Lamy wants to wrap up in 2010.

"The Doha agreement...has an ambivalent impact on developing countries and does not offer enough to the poorest countries," the IFPRI said. "It has to offer more in terms of market access and reduced trade costs."

Economist estimates of the benefits of a Doha deal vary widely, ranging from negligible to hundreds of billions of dollars. A full calculation is impossible until a deal is signed and it is clear what goods will remain shielded from external competition.

The WTO ministerial in Geneva, on the eve of a climate change summit in Copenhagen, was not meant to be a negotiating session for the Doha Round but officials stressed the need to turn that deal into an economy booster.

Brazilian envoy Flavio Damico said the lack of agreement about the shape of a global trade accord, despite years of discussions among diplomats and ministers, could cast a shadow over efforts to clinch a Kyoto Protocol successor.

"There is a huge stress on the multilateral system. We are being asked to do a number of things simultaneously, and we don’t have a good political environment to take up all those challenges," he said.