<B>By Vijay MAKHAN</B>

As was forewarned and forecast in this very column on the day the last World Trade Organisation (WTO) mini-ministerial opened in Geneva on 21 July, the talks collapsed after the negotiations went into extended mode. As was also predictable by those who follow these jamborees closely, the negotiations became a further mini-mini-ministerial! The Group of Seven (the USA, the European Union, Australia, Brazil, India, China and Japan) went into closeted talks until the wee hours of the morning for a couple of days much to the disgruntlement of the majority of the developing countries which until then had felt privileged to have been invited at all in the so-called Green Room process. Uhuru Kenyatta, the Deputy Prime Minister of Kenya, is reported to have castigated the procedure and decried the fact that yet again the African negotiators were left cooling their heels in the waiting room while the Big Seven were in the kitchen (negotiating room) busy attempting to serve themselves first!

Now that the dust has more or less settled on the latest round of the never-ending Doha negotiations, and the Big Seven are almost done blaming each other for the collapse of the talks, where does that leave the developing world, principally the African countries, which had been sung the praise of a liberalised multilateral trading system and the billions of dollars that would literally flow into their coffers?

From information gradually seeping out from various interested quarters, it seems that the stumbling block was disagreement on the threshold at which special safeguard measures could be triggered by the two emerging developing giants, India and China, to prevent damage to their farm products from cheaper imports. That is, India and China desired to slap extra twenty five percent duties should imports be up by fifteen per cent whereas the USA essentially wanted the triggering of extra duty only after an import surge of forty percent over the average of the preceding three years. This then, seemingly, was the straw that broke the camel?s back! But, more is now emerging.

This year is election year in the United States and the important states like Texas, California, among others, are major components of the American farming belt. The USTR (United States Trade Representative) Susan Schwab could on no account take the risk of agreeing to major agricultural subsidies cut ? despite having proposed a substantial decrease to 17 billion US$ ? thereby rubbing the US farmers on the wrong side at this critical stage in the run-up to the elections. (The Indians and the Chinese wanted further cuts to reflect the current reality, given that the American subsidies this year had averaged only 7 billion US$ on account of the hike in world prices of agricultural products). On the other hand, elections are fast approaching in India itself and are scheduled any time soon after April 2009. For the past few years, a number of suicide cases have been recorded in the farmer community across India on account of the expensive and beyond their means costs of farming. With their fortune already smeared by this fact and given the volatile nature of politics in India, the ruling political class is not in a position to risk accepting a deal that will surely lead to an exacerbation of their predicament and cost them votes. Hence, the posturing at the WTO talks. But that is not the end of the story!

At the WTO, the convention is that ?nothing is agreed until everything is agreed?. The temptation then of certain parties to open discussions on aforehand agreed items is always there, should they feel uncomfortable or aggrieved by proposals on other items of concern to them. (A case in point is the EU pulling out of the Banana deal that had been struck with the Latin American producers a few days earlier).

<I>«(...) it seems that the stumbling block was disagreement on the threshold at which special safeguard measures could be triggered by the two emerging developing giants, India and China (...)»</I>

The issue on which the negotiations floundered was item number 18 on an agenda of 20 items. It would appear that the USTR had signified her agreement on the agricultural market issue at informal consultations held with the Director-General of the WTO. Hence, the statements of nearing agreement that hit the headlines during the weekend of 26 July! Our own Rama Sithanen did not miss the opportunity of making a near-euphoric anticipatory statement in our local press from Geneva! But then, item 19 on the agenda dealt with the thorny issue of cotton which was the main concern of the African producers of that commodity, principally Mali, Benin, Burkina Faso and Chad, categorised as Least Developed Countries. Hefty subsidies principally to the American farmers account for the dire impoverishment of the cotton producers from these African countries and they were looking forward to having this issue adjudicated favourably to them. But the USTR could not take that risk, again for fear of the political damage that would do in her country. So could it be that to avoid debating item number 19 and give in to the justified demand of the Africans, it was a better strategy to scuttle the talks on item number 18 and blame the others for the failure? It?s an avenue worth prodding!

Last Wednesday, the undersigned met Pascal Lamy, the WTO Director-General coincidentally in New Delhi. And of course the conversation that ensued focussed on the failed Geneva talks. Mr. Lamy sounded as optimistic as ever as. When taunted as such, he stated unabashed that he was an "activist" as opposed to being an "optimist"! His comment on the African delegations present in Geneva during the talks sounded rather condescending?that they had made progress in their negotiating stance! Okay, so what next? A meeting may be convened, no doubt. But whether it will conclude positively and in the interest of the developing countries is a bet that cannot be taken lightly.

<I>«Such a grouping would surely attract the sympathy of the developed countries which, in turn, would feel less threatened by its demands and therefore be more accommodating ...»</I>

As it is, the Doha Round no longer has the trappings of the Development Round that it was meant to be. It seems more like an Agriculture Round! It would be in the interest of the developing countries (all of them inclusive of India, Brazil, China and South Africa) to sit down together and put up a common front after ironing out their own differences, for differences there are. That will also help to allay the suspicion entertained by the majority of the developing countries which feel left out of these negotiations, and that things are being cooked behind their back. Alternatively, the African countries, given their low level of development, may consider the option of forming a separate category of developing countries distinct from the likes of the emerging and larger economies like India, China, and Brazil. Such a grouping would surely attract the sympathy of the developed countries which, in turn, would feel less threatened by its demands and therefore be more accommodating in the knowledge that they would not have to offer the same advantages to the larger and more developed among the developing countries. There is, of course, the likelihood that some of the latter countries might resist the recognition of such a new group in the negotiations.

But then nothing ventured, nothing gained!