Correcting Misperceptions

Peter D. Sutherland

From Foreign Affairs, December 2005 -- WTO Special Edition

Summary:  If trade talks were founded on a rational analysis of economic interests, they would be much easier to conduct and conclude. But most are not, and the Doha Round is no different. The key to ensuring that something worthwhile does emerge from it is to distinguish narrow political agendas from the broader public interest.

PETER D. SUTHERLAND is Chairman of BP p.l.c. and of the Advisory Board on the Future of the World Trade Organization. He was Director-General of the General Agreement on Tariffs and Trade from 1993 to 1995 and the founding Director-General of the WTO.

In this sense, at least, the problem of preference erosion is very limited -- to a handful of poor countries that could be compensated without great financial strain. Certainly, the issue should not drain the resolve of developing countries to draw something positive from the Doha Round.

CORRECTIVE VISION

Although some of these issues have been identified, for the moment they are treated in a piecemeal fashion within and outside the WTO. Yet for the Doha Round to succeed, it needs to be driven by a broad vision. Not all of that vision can be secured in the WTO. In parallel, to ensure that poor countries can implement new WTO obligations, industrialized countries should also put forward a generous "aid-for-trade" financial package.

Furthermore, particular attention should be paid to the supply-side capacity of developing countries -- an area amenable to private-sector involvement. Major companies, including a growing number in developing countries, benefit enormously from the global economy and the rules-based multilateral trading system on which it depends. These companies should consider working with struggling, would-be exporters in the world's poorest nations. Such involvement would not be an initiative with any short-term payback but an exercise in solidarity for the future.

If multilateral trade negotiations were founded on a rational analysis of current trade interests, future prospects, and potential opportunities, then they would probably be a lot easier to conduct and conclude. The Doha Round is no different from other rounds in being a hodgepodge of real and imagined interests distorted, exaggerated, or ignored under the influence of hyperactive political imaginations. It is to be hoped that at the Hong Kong meeting, ministers and their advisers will take greater care to distinguish their narrow political agendas from the broader public interest.