Food crisis puts Doha trade talks into limbo

Posted: 30 May 2008

The global problem of rising oil and commodity prices is having a negative impact on the viability of the current round of Dohatrade talks, says an editorial in The Nation newspaper in Barbabos. So much so that it is off the table, so to speak, among most countries at this time.

Whether the talks could be resuscitated is left to be seen. But leaders of the world's major institutions - the World Trade Organisation, International Monetary Fund and the Organisation for Economic Cooperation and Development - are pushing for the completion of the Doha Round as a way to solve the present food crisis.

The question is: can it? It must not be forgotten that the objective of the Doha agenda is to expand trade in all agricultural products. In times of scarcity and high prices, every country fends for itself and Doha does nothing to help governments prioritise food production.

In a paper issued by the Institute for Agriculture and Trade Policy (IATP), enormous doubt was raised about the efficacy of these talks in light of the global food crisis. High among these was the enormous speculation in the commodity markets resulting in very high world prices.

In addition, there is a growing tide of global nationalism in the face of this crisis. In the long march towards globalisation, international borders and trade barriers came down. Communism fell. Protectionist walls in Latin America and elsewhere were dismantled.

Globalisation in retreat

In a globalisation manifesto, New York Times columnist Thomas Friedman recently declared that the Internet and other planet-spanning technologies were erasing national boundaries. The world, he said in a 2005 best seller, was flat. This is no longer the case.

The global economy appears to be entering an epoch in which governments are reasserting their role in the lives of individuals and businesses. Once again, barriers are rising and some are calling it the new nationalism.

The mantra of easy globalisation is in retreat. The market theory triumphed over the nation state during the 1980s, starting with British deregulation under Margaret Thatcher, but the state is now reasserting itself.

The IATP paper, as a possible solution, called for a review of the Uruguay Round on Agriculture and the Doha mandate and said governments must be allowed to implement policies that strengthen domestic food and agricultural systems.

It also called for protection against subsidised foods from developed countries and for trade rules to prevent harm to other countries' food security and livelihood as local production and jobs are necessary for development.

The third suggestion was the creation of global competition rules to limit the power of international companies in commodity and food markets. These rules must prevent large firms from abusing their market power.

With these concerns, it is clear the food crisis has changed the perspective on global trade.

This editorial was published by The Nation on 29th May, 2008