CANCUN MEETINGS ON THE DOHA DEVELOPMENT AGENDA

This is the website of the World Trade Organization for “The Fifth WTO Ministerial Conference” to be held in Cancún, Mexico from 10 to 14 September 2003.

The agreement to allow drugs to combat AIDS to be imported into affected countries from the lowest price international source, announced a couple of weeks ago, is the result of negotiations in preparation for this meeting.

This meeting is to focus importantly on freeing trade in agricultural products. It has been said that subsidies for agricultural products in rich countries amount to about $300 billion per year, or six times the total of all development assistance. These subsidies drive prices down, making it hard for farmers poor countries to compete in world markets for agricultural products. There are of course also tariffs and non-tariff barriers to agricultural trade.

A second major focus is industrial trade, especially clothing and furniture. Again, poor countries lose markets due to trade barriers in these items that would be areas of their comparative advantage.

It will be interesting to see if the developed nations will make concessions in favor of the economic development of poor nations. As a consumer living in the U.S., I would love to see cheaper clothes and furniture, and to see more food that I had not had to subsidize via taxes. But of course, there are important groups of producers in rich countries, with political power in their countries, whose interests would be threatened by real changes. We will see!

It has been suggested that the major problem is in fact trade barriers in developing countries themselves, limiting trade among poor nations. It has also been suggested that the main beneficiaries of an international agreement reducing such barriers would be the people in developing nations. I don’t know, but it sounds possible to me.

So what does this have to do with Knowledge for Development. On the one hand, I think it is only through the development of knowledge of trade barriers and their effects that it is possible to reform the system. Indeed, I suspect that the wide dissemination of such knowledge among the mass of potential beneficiaries of trade reforms will it be possible to muster the political will for reform. The potential big losers will recognize their risk and organize to oppose reform. The winners have to promote their own interests, and will do so effectively only if they are informed.

There is a second level of concern. It seems likely that innovation lags when producers can profit from inefficient production, their markets protected by strong systems of trade barriers. The evidence seems to be that a vigorous international trade regime encourages high rates of technological innovation, ultimately benefiting all.

So lets watch what happens at Cancun!