Terrorist threat overshadows key trade meeting

When American delegates arrive in the Qatari capital of Doha today, they will be issued with gas masks and two-way radios in …

When American delegates arrive in the Qatari capital of Doha today, they will be issued with gas masks and two-way radios in case of a terrorist attack. European Union officials are worried that their food might be poisoned by admirers of Osama bin Laden and the Qatari government is terrified at the prospect of protesters slipping into the country to demonstrate against global capitalism.

All in all, this weekend's ministerial meeting of the World Trade Organisation (WTO) is set to be a thoroughly jumpy affair. Until the beginning of this week, it was still uncertain whether the meeting would go ahead in the tiny Gulf emirate of Qatar. The Qatari authorities finally succeeded in persuading the WTO that they could guarantee the security of the meeting.

To add to the tension, some economists predict that, if the 142 countries represented in Doha fail to agree to launch a new round of trade liberalisation, the world's economy could be plunged into crisis.

The US trade representative, Mr Robert Zoellick, suggested this week that the Doha meeting was not just an economic event but represented part of the fight against terrorism. "Just as the Cold War reflected a contest of values, so will this campaign against terrorism. Just as America's Cold War strategy recognised the interconnection of security and economics, so must its strategy against terrorism," he said.

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The WTO makes the rules for international, multilateral trade. Its admirers argue that liberalising trade has lifted many of the world's developing nations from poverty. The WTO can produce extensive statistics showing that countries that open up their markets are more successful than those that remain closed.

But critics claim the trade rules are tilted in favour of rich countries and that independent states are obliged to follow rigid economic policies in return for access to world markets.

Apart from discussing a new trade round, the meeting in Doha will rubber-stamp the admittance of China and Taiwan as members and will look at how the existing trade rules are being implemented.

Until now, WTO talks have seemed like a tug-of-war between the two titans of the US and the EU - with the rest of the world standing around like the chorus in an opera. The admission of China could change that, adding a substantial new element to negotiations.

Mr Zoellick's attempt to link the success of the WTO meeting with the progress of the war against terror is unlikely to prevent bitter disputes from breaking out this weekend. In fact, India threatened to walk out of the meeting before it even began. India's Commerce Minister, Mr Murasoli Maran, fears that the rich countries are determined to bulldoze poorer countries into accepting a broader role for the WTO.

"If we have no say in setting the agenda, why should we be there?" he said.

Setting the agenda for a new round of trade negotiations is what the weekend's meeting is all about. The WTO failed to launch a new round in Seattle two years ago because the disagreements over the agenda were so profound.

When the former head of the WTO, Mr Peter Sutherland, successfully completed the Uruguay Round of trade talks in 1994, it was partly because he ensured that everything was agreed by officials before ministers met. The disagreements are not so great this time as they were in Seattle, but some awkward questions remain to be resolved. Among the most contentious issues are agriculture and patent rights for manufacturers of life-saving drugs.

Eighty per cent of the WTO's member-states are developing countries, for many of which agriculture forms a large part of the national economy. Permitted tariffs for agricultural products are more than 50 per cent, compared to an average of less than 5 per cent for industrial products.

Even if poor countries gain access for their agricultural products to the lucrative markets of the developed world, they must compete against farmers who are heavily subsidised by the state or, in the EU, by the Common Agricultural Policy.

A draft declaration to be considered by the ministers, who include the Minister for Agriculture, Mr Walsh and the Minister for State at the Department of Enterprise, Trade and Employment, Mr Tom Kitt, calls for reductions "with a view to phasing out" of all forms of export subsidies. It also calls for substantial reductions in other forms of state support to farmers.

The European Commission wants rich countries to give significant trade preferences to the least developed countries and to do more to help poorer countries to make their agriculture more environmentally responsible.

One of the flashpoints between the EU and the US could be over the EU's wish to enshrine the precautionary principle in trade rules, so that governments could ban products such as genetically modified food because they feared they could be dangerous.

But the most emotionally charged debate is likely to be over the cumbersomely named Trade-related Aspects of Intellectual Property (TRIPS) - an agreement that obliges WTO members to respect patent rights.

A number of developing countries, led by Brazil, want a declaration that makes clear that the obligation to respect patent rights should not prevent governments from taking action to protect public health.

At the heart of this debate is the desire of some poor countries to allow local manufacturers to make cheap, generic versions of expensive drugs used to treat HIV and Aids.

For millions in Africa and elsewhere, this complicated piece of trade legislation is literally a matter of life and death.

But the US is resisting pressure for a strong declaration and one senior US trade official accused poor countries of using the controversy over HIV drugs to help their indigenous companies to export cheap versions.

"The other thing is that none of these drugs are going to come forth in the future if there isn't an incentive for this research. And that's the balance we have to find. We've got to find a balance that provides an incentive for drug companies to produce these drugs, to develop the drugs - and there are enormously expensive costs of development - and yet allows countries to be able to meet their needs," he said.

Washington's opposition to tinkering with TRIPS looks less convincing in the light of its reaction to the anthrax scare, when it considered scrapping patent rights to allow faster production of drugs to treat the illness. Poorer countries who face the prospect of millions of their citizens dying of Aids regard the US behaviour as a glaring example of double standards in action.

The US and the EU agree that a new trade round is desirable, but they differ on how comprehensive it ought to be. Washington favours an uncomplicated agenda that focuses mainly on conventional trade issues.

But the EU wants to broaden the agenda to include competition issues and to put more focus on the environment.

Some poorer countries, led by India, would prefer to avoid a new round altogether and concentrate on improving the way existing rules are applied.

But despite his criticism of the organisation, even India's Mr Maran believes the WTO is a necessary evil.

"Necessary because it provides for most-favoured nation treatment and a rule-based multilateral trade regime. But it is an evil because it wants to curb our sovereignty and cut our jobs," he said.