Collapse of WTO talks a missed opportunity

The attitude of the US to these talks and to the WTO in general is exemplified by its cotton subsidies. The US spends nearly US$4 billion annually on subsidies to its cotton producers - roughly three times its entire aid budget for the whole of Africa.

The US is the world’s largest exporter of cotton, with more than half of its cotton crop being exported. These subsidised exports have a huge impact on global prices.

Oxfam estimates that global cotton prices are depressed by about 10 per cent due to US subsidies. For cotton producing nations in Africa, such as Mali, this is a devastating loss of income. Mali lost an estimated US$43 million in export earnings due to these US cotton subsidies in 2001 alone. By comparison, Mali received US$38 million in foreign aid from the US.

In 2002 Australia supported Brazil in its challenge to the US in the WTO over cotton subsidies - and won. WTO dispute settlement panels found that the US cotton subsidies were unlawful under WTO rules and called for their removal. But the US has until now given no indication that it will abide by this WTO decision.

Does the collapse of last week’s talks mean that the Doha Round is dead? Hopefully not. As Indian Commerce Minister Kamal Nath told a news conference, “I would only urge the Director-General to treat this as a pause, not a breakdown, to keep on the table what is there”.

Too much has been achieved to give up now. If it takes time to do a deal that is good for development then so be it.

The talks can and should start again, perhaps when a new US President is in office and the Indian elections are over, but on a new footing, with development at the centre.