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Getting Wise To The WTO

Getting Wise To The WTOTim Wise, deputy director of the Global Development and Environment Institute at Tufts University, believes that the World Trade Organization has missed the mark on the objectives set for its latest reforms.

Medford/Somerville, Mass. [12.27.05] The World Trade Organization recently wrapped up its sixth ministerial conference in Hong Kong, a six-day bargaining session officials are calling a “modest success,” according to Forbes. Though the conference, which brought together trade representatives from nearly 150 wealthy and developing nations, has garnered some praise, Tufts expert Tim Wise says the WTO is failing to meet the broad objectives of the world trade talks.“There are very good reasons why the (WTO) talks have lost momentum. For most countries, there is very little development left in them,” Wise, deputy director of Tufts’ Global Development and Environment Institute, told The Washington Post.

“At the end of this period of reform, according to World Bank scenarios, Bangladesh, the Middle East and Africa are worse off than they were before they started,” he explained to Reuters.

The period of reform Wise refers to is known as the Doha Development Round, which was launched in 2001 at the fourth WTO ministerial in Qatar with the mission of boosting economies in developing countries by reducing agricultural subsidies and tariffs in wealthier nations.

The problem, Wise explained to Reuters, is that the original predictions of the impact of these reforms have changed dramatically.

Two years ago, the World Bank estimated that there would be about $800 billion in total gains from the Doha Development Round, with $539 billion going to developing countries, Wise told Reuters.

In a report last month, according to Reuters, the World Bank adjusted those figures; the organization now estimates that only $287 billion will be gained overall, with developing countries seeing only $86 billion.

According to Wise’s comments to Reuters, additional figures show that developing countries could receive even less.

“Under what the bank calls a likely Doha outcome, 70 percent of the gains will go to developed countries,” he told Reuters. “Only eight developing countries -- including Brazil, Argentina, China and India -- get 50 percent of all developing country benefits.”

Based on the figures in its latest report, the World Bank says that the Doha Development Round will lift 66 million people out of poverty, Reuters reported. But, the news organization pointed out that, under the “likely Doha outcome” scenario Wise described, that number gets slashed to 6 million people who would be “lifted out of the $2 a day poverty level category.”

“People are getting buffaloed,” Wise told Bloomberg. “One of the reasons there is so little enthusiasm for an agreement now is that there is so little to be gained.”

 

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