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Published on April 16, 2008

The World Trade Organisation's senior officials' meeting in Geneva this month is likely to fail, and lead in turn to the failure of the annual ministerial meeting, because the United States lacks full authority to negotiate.

The special negotiating authority of US President George Bush on trade agreements expired last year.

The WTO Ministerial Conference has been suspended since the Hong Kong meeting in 2005 due to opposing interests - mainly in the farm sector - failing to narrow their differences.

Trade Negotiations Department director-general Chutima Bunyapraphasara likened the WTO talks to an ailing patient in an intensive care unit.

She is not optimistic about the negotiations. The Kingdom will therefore further concentrate on bilateral and regional trade-agreement negotiations to ensure a competitive edge in the trade, service and investment sectors.

"WTO talks will be prolonged and end inconclusively," she said.

Trade Negotiations Department deputy director-general Winichai Chaemchaeng said the deadlock in the Doha Round would be difficult to break in the next few years, as developed countries as well as emerging nations still resist moves to open markets.

The Doha Round talks are aimed to narrow the gap between developed and developing countries under trade liberalisation.

Farm-subsidy reform is at the heart of the WTO debate at the moment, as some developed nations are less forthcoming in cutting farm subsidies. However, developing countries are not willing to cut tariffs on industrial products as an exchange benefit.

Moreover, the developed countries still want to protect domestic labour while developing nations have called for them to freely allow the entry of foreign labour.

Should the world trade talks fail, Winichai said developing nations, including Thailand, would continue to face tough competition in the agricultural sector as the European Union and the United States will continue subsidising their farm sectors, despite agreements in principle to cut subsidies.

The EU and the US are drawing up models to cut farm subsidies under the international trade talks.

According to an Oxfam International report, farm subsidies in the EU and US amount to US$63 billion (Bt2.4 trillion) a year. The EU spends $42 billion to subsidise its farmers, while the US spends $21 billion. If the trade round fails, those figures could increase by $13 billion for the EU and $700 million for the US each year in additional subsidies to their farming sectors.

Subsidy cuts and tariff reductions for commodities should help poor countries to gain more market access. However, if the WTO continues to allow subsidies, poor countries will be adversely affected because they have far less money to support their farmers than wealthy nations, Winichai said.

As Thailand is one of the world's leading agricultural countries, it will suffer from high farm subsidies by developed nations, he added.

Moreover, the Kingdom would also face stiff competition for non-agricultural market access to South American countries and India, as their import tariffs for non-agricultural goods are very high.

To ensure trade liberalisation under one umbrella, Winichai said developing countries should strengthen their collaboration by uniting to apply pressure on rich countries to cut agricultural subsidies, while rich nations should also relax their demands in order to reach a consensus agreement among all WTO members.

Petchanet Pratruangkrai

The Nation