KEY POINTS:
This week trade ministers of many countries, including our own, are meeting in Geneva to try to salvage something from failure of the Doha round of global negotiations. The best that many observers dare hope is that a deal might be done that preserves the status quo. That
might stop the protective slide until the time is ripe for a new effort.
It is clear in retrospect that the time was not ripe seven years ago when the Doha "development" round was launched with the aim of bringing poorer countries into the trade between rich markets.
It was barely seven years since the conclusion of the Uruguay round that had succeeded in broadening the ambit of trade rules beyond manufactured goods to consider agriculture, services, creative property and trade-distorting subsidies as well as tariffs.
That deal had been hard enough to reach and was the bare bones of the task still ahead. Putting flesh on those bones would have been achievement enough for the next round, but with legions of Third World and former communist countries joining the World Trade Organisation, a broader ambition could not be avoided.
The new members were particularly attracted by the prospect of easier access to rich markets for their agriculture but not nearly as keen to expose their domestic industries to import competition.
The round agreed on a slower track of tariff liberalisation for developing countries, but agricultural export subsidies in Europe and the United States remained the stumbling block - for each other as well as the developing world. A New Zealand diplomat, Crawford Falconer, has chaired the agricultural negotiating group and our Trade Minister, Phil Goff, has been invited into the end-game negotiations between the major economies, the so-called green room, at Geneva this week.
Mr Goff remains optimistic. "The mood was generally reasonably upbeat," he said after the opening session. "We are in a much stronger position than we were two years ago." Others are not as sanguine. Last week, Latin American negotiators declared the latest proposals from the big three, the United States, Europe and Japan, too vague on agricultural subsidies and said the offer seemed a step backward on industrial tariff reduction.
Retrograde signs are widespread. Concern at global warming has diverted crops to biofuels, causing food price shocks that have, in turn, caused some countries to limit exports. Protectionist sentiment is dominating politics in the United States where the Congress recently passed a farm support bill even more generous than the last, this time over the veto of President George W. Bush whose global leadership has been as dismal on free trade as on other fronts. His likely successor, Barack Obama, wants to revise the North American Free Trade Agreement.
Yet high food prices also provide a rare opportunity for progress. They have reduced the levels of subsidy required to give European and American farmers the returns their Governments promise them. The actual subsidies are now well below the permitted levels, which are the stuff of WTO negotiations. The green room argument has been rendered academic.
But if the ministers emerge with an agreement that does little more than confirm the Uruguay targets, it will be an achievement in the present climate. That is how far Doha has fallen below the hopes of 2001. Launched in the aftershock of 9/11, the round was perhaps a victim, like much else, of the Iraq invasion. A distracted US and a divided West lost their focus on global progress. If nothing is salvaged from this sorry round, it is the world's poor who will pay the highest price.
