Summary: EU Trade Commissioner Mandelson: "The costs of Doha failure demand we find a deal" (London: 23 June 2006)
EU Trade Commissioner Peter Mandelson has today offered a stark assessment of the steep costs of failure in the WTO Doha trade talks. Speaking to an audience in London, ahead of Ministerial talks in Geneva next week, Mandelson argued that the potential gains already on the table in the Doha Round and the heavy systemic and political costs of failure mean that negotiators must not be "tempted by the false comfort of inflexible and entrenched positions".
Mandelson offered a complete picture of a final deal, insisting that an ambitious outcome not just in agriculture but also in services, industrial goods and trade facilitation negotiations was the key to a development Round. Mandelson argued that as well as offering a boost to the global economy for both developed and developing countries, the Doha Round offers a chance to integrate the emerging economies of Asia and South America into the global trading system and reinforce the multilateral
trading system. The alternative, he said, "is a system in which the large all too often strong-arm the small. Trade muscle instead of multilateralism".
Mandelson said: "Failure means losing the possibility of binding the EU's agricultural reform in Geneva and the possibility of locking in similar reform in the United States. The world would lose new market access in farm goods - the deepest, steepest farm tariff cuts ever offered. New trade in manufactures would be lost that is not just vital for the EU and the US but for the growing industrial sectors of the developing world. To lose even a modest deal on services trade would mean foregoing
the developmental benefits of foreign investment and the global flow of skills and experience to the developing world. We would lose a new multilateral agreement on duty-free quota-free market access for the Least Developed Countries. We would lose a huge new global package of Aid for Trade. We would lose the chance to rewrite the global trade rulebook in a way that opens the door to new trade and closes the door on corruption. And we would lose the conviction that the WTO system can function
with a membership that reaches 150 and mirrors every increment of size, interest and capacity in the global economy."
Tackling recent criticism of the EU's development credentials in the Doha Round Mandelson argued that critics of the Round needed to look more closely at the benefits of opening up trade in services and industrial goods among developing countries. He also pointed to the potential benefits of trade facilitation negotiations, which he said could add 8% to Southern Africa's GDP by 2020 - the equivalent of doubling Africa's official development assistance. Mandelson argued that these potential
benefits meant those who argued that developing countries should walk away from the Doha round were "simply wrong".
Looking ahead to Geneva next week, Mandelson welcomed the signal by the US President in Vienna that the US is ready to make tough decisions to reach an agreement and will not allow the Doha round to fail. He will say: "There is a three way bargain here. The G20 wants steeper cuts in US farm subsidies before it is willing to table the required cuts in industrial goods. Washington can unlock this by stepping forward with a better offer. If this happens the EU will, at the same time, meet them
both with a strengthened offer".
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