How to make the WTO work properly

Emma Bonino and Benedetto Della Vedova, Inter Press Service, Brussels

"Economic aid and debt cancellation are indispensable means to help many developing countries, but they are not lasting solutions. What these countries need is control of the means that guide their own development."

The path prescribed for poor countries in the 2003 United Nations Development Program (UNDP) study is export expansion. It won't be easy. Rich countries are doing little to make their markets more accessible to poor countries' products, neither reducing tariffs and subsidies nor eliminating quotas.

For example, European Union (EU) subsidies for raising cattle increased in 2002 to US$913 per animal, almost double the per capita income in Sub-Saharan Africa, where the EU aid is eight dollars per person.

The weakness of the world economy has been cited as a major factor in the slowdown of trade growth after its soaring period in the 1990s, making it difficult to open markets and boost the exports of poor countries. But another factor, perhaps the principle one, is the deadlock between positions within the WTO, which has frozen negotiations.

After the disaster of the WTO ministerial in Seattle in 1999, the international community managed to come together around an ambitious document entitled the "Doha Development Round". Twenty months later, on the eve of the Cancun Ministerial, we see that the time frames and goals decided on in Doha to relaunch international trade have not been met.

The most contentious issue is agriculture. Washington has proposed an ambitious negotiating platform that it hopes will win over its more intransigent critics and soothe the distrust aroused over the last year after it significantly increased protectionist measures in this sector.

The EU responded by approving reform of its Common Agricultural Policy (CAP) which, while eliminating some of the more distortive components of its subsidies, left intact the full amount dedicated to agricultural protectionism, which would begin to decrease, and then very gradually, only after the incorporation of the new EU member nations in 2004.

The U.S. and EU, the giants of world trade, blame each other for blocking negotiations and are engaging in a trade war (effecting steel, agriculture, and genetically modified organisms) that is certainly not easing the way for an accord among all participants in the Cancun ministerial.

If the agriculture talks cannot be unblocked, there is a very real risk that the entire Cancun round will be a failure, which would spell disaster for the WTO.

While no one is free of blame, Europe is more protectionist than the U.S. According to the UNDP comparison of tariff and non- tariff trade barriers with relation to the exports of developing countries, Europe's average rating is 20 percent, well above that of the U.S., at 9.7 percent.

A renunciation of agricultural protectionism, which has become the symbol of the egoism of the Western world, is a necessary first step. The same is true in the textile sector.

But this is not enough. It is also necessary to avoid introducing into negotiations a series of "non-trade subjects" -- for example, social and environmental standards -- which, though worthy of attention, are seen by the developing countries as the last-resort weapons of a surreptitious protectionism.

In the past the WTO has shown its effectiveness in fulfilling its specific mission of driving world trade. To burden it with the responsibility of pursuing other entirely different aims would inevitably diminish its efficiency.

For example, the claim that the WTO could require adherence to minimal work standards as a condition for opening up to imports stinks of protectionism. Equally effective means to this end exist in the International Labor Organization, which the international community should work through if it wishes to enforce respect for basic international conventions (child labor, forced labor, discrimination against women, labor union rights).

The same holds true for the environment and attempts to use the WTO as a forum for imposing trade sanctions for non- compliance with the Kyoto Protocol.

The Transnational Radical Party has long asserted that the globalization of markets must be accompanied by a "globalization of freedom and democracy", which is without a doubt the appropriate vehicle to consolidate economic growth.

However, to set this process in motion, it makes little sense to resort to shutting down trade negotiations. What is needed is an awakening of political conscience that could inspire the creation of a sort of WDO, a World Democracy Organization made up of free, democratic countries and charged with the defense and promotion of human rights, the rule of law, and democracy.

Achievement of this ambitions goal can come only through the use of all available political and diplomatic means -- with an unprecedented level of determination.

It is in the interest of both developing and industrialized countries to join forces to overcome the crisis of the WTO. The only alternative to the multilateral system of the WTO is the proliferation of regional bilateral agreements, which would create limitations and obstacles both in the political and the economic sphere.

The writers are deputies in the European Parliament and leaders of the Transnational Radical Party.