The Economist takes a critical look at the recent WTO meeting in Hong Kong.
The meeting’s most notable accomplishment was that it did not collapse as previous gatherings had in Seattle, in 1999, and Cancún, in 2003. The main new achievement was to agree on a date, the end of 2013, for the elimination of export subsidies on farm goods. There was also a much vaunted package of goodies for the world’s least developed countries, which gained promises of free access to rich countries’ markets for at least 97% of their goods.
Continued emphasis on agriculture in trade negotiations deserves more attention. Agriculture as a share of world merchandize exports is less than 9%, and if we also consider the fact that that trade in merchandize is 81% of the global trade (19% is services), share of agriculture in global trade is even lower. Nonetheless, agriculture attracts the most attention during WTO meetings and was one of the major reasons previous negotiations collapsed. More attention should be paid to issues that affect the other 90+% of global trade. In many developing countries, it is the absence of strong economic and political institutions that inhibits their aspirations of joining the global economy, not the policies of developed countries. Developing countries should concentrate their efforts on addressing issues like protection of real and intellectual property rights if they want to see domestic economies grow and domestic firms become more competitive in international markets. Economic liberalization and institutional reform, therefore, should capture most attention in trade negotiations. More on these issues in Africa here.