Doha Failure a Disservice to All Parties

29 June 2006

Australian Financial Review

John Denton
Partner & Chief Executive Officer
Corrs Chambers Westgarth

European businesses have as much at stake in successful Doha trade talks this week as businesses in any other country. So they cannot be disengaged from this potential milestone in global trade liberalisation.

The Business Council of Australia has identified potential pressure from European businesses on their governments as a way of breaking the impasse over Doha. In particular, European business leaders must place as much pressure as possible on EU Trade Commissioner Peter Mandelson to urgently move the negotiations forward.

The reality is that Europe remains at the heart of blockages within the Doha round of trade negotiations centred on agriculture. At risk is the expansion of international trade in services and industrials.

But unfortunately the response from Europe has reflected an entrenched view that Doha trade liberalisation is more a risk than an opportunity. It perhaps also reflects wider resistance inside the European Union to new markets and an aversion to change.

In contrast, Australia sees the opportunity for growth from the potential liberalisation of trade in all key areas, including services. Australian business has been especially concerned at the lack of attention given to services in the Doha round. The Australian government has tried to find a way to boost offers on services. However, little headway has been made and progress is unlikely until an agreement on agriculture is achieved.

While the potential benefits from Doha would be widespread, developed economies stand to gain substantially from services liberalisation. Businesses in Europe need to focus on the harm the stalemate over agriculture might cause to themselves and the potential it has to stymie global growth.

Trade ministers meeting in Geneva this week hold the key. They can take the courageous step of reforming world trade. Or they can take the easy way out and let this opportunity slip away.

There is a great deal at stake. The Doha round represents an opportunity for all 150 World Trade Organisation nations to share in greater world economic growth over coming decades. Under the agreed aims for the Doha development agenda, significant benefits from the increase in global growth would flow to developing nations.

In 2007, looming political considerations on both sides of the Atlantic are bound to adversely affect the climate for finalising a deal.

The BCA believes that strong and forward-looking leadership will be required from key WTO member governments – and the role of European business in applying a sense of urgency should not be overlooked. This will be needed if all WTO nations are to combine to overcome the narrow interests that have held back the Doha round for far too long.

It is essential that negotiations quickly progress to the stage of finalising commitments on genuine market access across all areas, including services.



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