Is WTO about to abandon dream of global free trade?
By Tom Miles
GENEVA (Reuters) - As it seeks a new chief to lead it out of a negotiating death-spiral, the World Trade Organization looks doomed to be fatally undermined by new global carve-ups that will leave many of the world's poorest sidelined.
At its creation 18 years ago, as the "third pillar" of the post-World War Two economic system alongside the World Bank and the International Monetary Fund, tariffs fell by a third and world markets, from farm produce to finance, were opened up.
A boom in commerce ensued, gathering pace when China became a member in 2001. But then, at a meeting in Doha that year, the WTO launched an ambitious attempt to push for further liberalization that would help developing countries most of all.
The talks dragged on for 10 years, failing to resolve a split between the developed and developing worlds, mostly over agriculture. WTO Director-General Pascal Lamy, who vowed in 2005 to make them his "first, second and third priority", finally declared an "impasse" in 2011.
The WTO's first head, Peter Sutherland, wrote in an op-ed published on December 31 that it was "a unique failure in the history of multilateral trade negotiations".
The stalemate triggered a scramble to arrange preferential trade terms outside the WTO - regional deals such as the U.S.-led Trans-Pacific Partnership and bilateral agreements such as the one the European Union is pursuing with the United States.
"If either ever comes to pass, which I doubt, a huge share of world trade would be conducted within a discriminatory framework," wrote Sutherland.
Such deals were already common before the "impasse", but afterwards they became the main focus for many countries seeking a route back to economic growth. British Prime Minister David Cameron has made an EU-U.S. deal one of three priorities for the UK's presidency of the G8 group of nations, which began this month. Continued...