“Global South” Split Exacerbates Difficulties of Current WTO Negotiations, Conclude CIGI Working Papers

March 28, 2006

Waterloo, Canada - The Centre for International Governance Innovation (CIGI) has released two working papers focusing on the impact of the emergence of the developing countries for the outcome of the WTO Doha Round of trade negotiations and for economic development in the South more generally.

The papers conclude that new divisions and rivalries among developing countries, often called the “Global South,” and growing scepticism about what they may collectively stand to gain from the Doha Round, increase the likelihood that the latter will fail to conclude in a timely way.

Entitled “Trade, Development and the Doha Round: A ‘Sure Bet’ or a ‘Train Wreck’?” the first paper, by Daniel Drache, Professor of Political Economy, Associate Director of the Robarts Centre for Canadian Studies at York University, and an expert on trade and globalization, argues that when the above factors are combined with the already evident divergent interests of the South and North in key areas, a deal appears more distant than ever. Drache makes the case that it would appear that evolution is not going to be kind to the WTO Doha negotiations. The Doha Round is “too complex as divisions between the EU and the US have hardened; too intrusive to assuage many of global civil society’s concerns and too anti-development for numerous countries in the Global South to come on board.”

No one is pushing the panic button, says Drache, because there is no generalized drift toward protectionism – indeed bilateral deals are mushrooming. Nevertheless, he argues, the WTO has yet to process the consequences of growing self-confidence among an expanding group of emerging economies. The WTO focus on what countries cannot do (“negative regulation”) needs to be balanced, says Drache, with a more positive development agenda, if an anti-development bias is to be avoided. Countries are prepared to negotiate new arrangements outside the WTO with respect to generic drugs and other issues. The challenge facing the WTO is that while broadening market access is an ongoing issue, global poverty is on the rise throughout the Global South and particularly China.

A return by WTO members to “first principles” of multilateralism, global public goods and trade liberalization” could provide new directions, says Drache. But, he adds, “this is precisely what negotiators from the Global North are set to avert.”

The second paper, “Developing Countries and the WTO Agriculture Negotiations” by Jennifer Clapp, CIGI Chair in International Governance and Associate Professor in the Faculty of Environmental Studies at the University of Waterloo, explains that developing countries were instrumental in changing the dynamics of WTO agricultural talks, notably through the formation of new groupings such as the Group of 20 on Agriculture. Through this and other groupings, developing countries have voiced their desire for an agricultural trade deal that will deliver clear benefits the Global South.

But, as Clapp points out, there are divergent agricultural trade interests within the Global South. The 2004 inclusion of India and Brazil into an “elite group” of Five Interested Parties (FIPs, including the United States, the EU and Australia) at the WTO has raised concerns that these two large and emerging economies may not adequately defend the agricultural trade interests of the poorest and most marginalized countries. This tension only endangers the cohesion of the Global South as a negotiating force in the agriculture talks and raises important questions about the ‘development’ benefits of any agreement that might be reached.

Clapp’s analysis of the state of negotiations on agriculture, and in particular that of the EU position taken at the December 2005 Hong Kong WTO Ministerial meeting suggests that skepticism by the Global South is well founded. Although China and Mexico, as well as India and Brazil, stand to benefit, whatever deal will emerge appears destined to result in meager gains for the poorest developing countries. “In this context,” says Clapp, “it is ironic that the shifts in the negotiation process to include more developing country representatives may weaken solidarity in the Global South coalition on agricultural trade issues.”

The Working Papers are CIGI’s latest contribution to research in the field of international governance aimed at policy and decision makers as well as the general public interested in international issues.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.