Paul Vallely: The rich must not bully the poor: that's why Doha matters

World trade can only benefit the emerging and impoverished nations if the wealthy give way
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The Independent Online

It was the American baseball player Yogi Berra who once greeted a repeating pattern of failure with the infamous epithet: "This is like déjà vu all over again." The phrase was borrowed lastweek by a disillusioned observer at the breakdown – yet again – of the latest round of world trade talks in Geneva. We have had seven years of "break or make" crises, each followed by a similar breakdown. The difference is that this will probably be the final one.

Why so? And does it matter? Perhaps the homespun philosophy of the great New York Yankees catcher – better known now for the sentences he fumbled than the balls he caught – can offer a fuller explanation of why the Doha development round, which set out in 2001 to make globalisation work for the world's poor, has signally failed to do that. So here is the Yogi Berra Guide to World Trade.

"You can observe a lot just by watching."

The Doha meeting of the World Trade Organisation in 2001 was the first major international summit after 9/11, when terrorists devastated the World Trade Center in New York. International solidarity was in the air. Trade could help poor countries get richer, and fairer trade could help their economies grow more swiftly. What held them back was a raft of measures – tariffs, non-tariff barriers, labour and safety standards, competition and patent rules – designed to create a level trading field between industrialised nations, but which had been used by the rich world to skew trade to its advantage. Liberalising trade rules could benefit everybody. But as the negotiations dragged on, in round after round, it became clear that everyone wanted to preserve their own privilege while demanding that others made concessions.

Q: What would you do, Yogi, if you found a million dollars?

A: I'd find the fellow who lost it, and, if he was poor, I'd return it.

Are developing nations poor? That was the key question. In the old days, the wealth gap was pretty clear between the industrialised and the developing world. But, in recent years, powers such as Brazil, China and India have emerged as potential threats to the old elite. They are leaving the really poor, in Africa and elsewhere, way behind.

So the talks shifted from bi-polar (rich vs poor) to tri-party (rich vs emerging vs poor). Sometimes the emerging made common cause with the poor – against US subsidies on its cotton farmers, which made things tough for India and Mozambique alike. Sometimes they did not, when the poor were officially sidelined in the last days of the talks, and only rich and emerging delegates were allowed into the negotiating room.

"It was impossible to get a conversation going; everybody was talking too much."

There were 153 countries in the talks, plus pressure groups. The hope was that inter-group negotiations would arrive at an outcome that would satisfy everyone, even if it involved some disappointments for all.

But developing countries, both poor and emerging, wanted an end to subsidies to US and EU farmers, which give them an unfair advantage over other farmers. Europe and the US wanted others to make massive cuts in tariffs on industrial goods – which would increase unemployment, reduce tax revenue and seriously undermine Third World development. They wanted to protect infant industries, such as Brazil's car factories, until they are strong enough to compete with US and Japanese cars. This was the strategy that made Europe and the US wealthy, but which we now want to deny to others.

Meanwhile, the farmers of Africa did not get a look in, squeezed between the insensitivity of the emergers and the selfish intransigence of the rich.

"The future ain't what it used to be."

It has seemed unlikely for the past three years that a big agreement was possible. There was little political will for it, in the first place. And the poor nations weren't that anxious for it, as they were buoyed up by three years of rising commodity prices. The African economy was growing faster than at any time since the 1960s, partly because of the Gleneagles debt package, but also because China's insatiable demand for natural resources drove the terms of trade in Africa's favour.

Then things changed. First came the credit crunch, then the global food rise, then the oil price spike. The world's poor looked increasingly vulnerable. But the powerful nations saw no mileage in doing anything for the public good, if they had ever intended to, in the face of a faltering global economy.

"You better cut the pizza in four pieces because I'm not hungry enough to eat six."

The rich nations began to exercise the art of illusion. They made apparent concessions on reducing their enormous farming subsidies. But these did not add up. The US offered to cap subsidies at $14bn (£8.6bn), when it only spends $7bn at present. And it is reinstating cotton subsidies previously ruled illegal at the WTO. The EU offered only marginally more. The offer on non-agricultural market access would have required poor countries to make more tariff cuts than the rich.

"We may be lost, but we're making great time."

The dismantling of trade barriers has helped to propel the longest sustained period of economic growth in modern times. The fear now is that the world's economy could go into reverse, as countries faced with recession put the barriers up again.

"If you don't know where you are going, you'll wind up somewhere else."

World trade talks centre on the notion of reciprocity; you cut this, and I'll cut that. But a deal to help the poor should have acknowledged at the outset that the rich had to make much greater compromises than the poor. It never did, which is why it ended up with an unacceptable final offer that poor countries refused to sign, knowing that – under the WTO's virtually irreversible rules – they would be stuck with it for decades.

The trouble is that, now multilateral negotiations have failed, trade deals will be done on a bilateral basis between individual nations. And when one side is rich and the other poor there is little doubt who will come off best.

"I didn't really say everything I said."

No, but you meant every word of it.