The world economy has been given an important boost of confidence by the agreement in Doha, Qatar, yesterday to launch a new trade round under the auspices of the World Trade Organisation. As is usual at such gatherings agreement came at the last moment, when a number of outstanding contentious issues were bargained against one another. The outcome is an improvement on what many of the delegates from 142 countries expected, with all of them having to compromise on important interests. It represents a broadly acceptable platform on which to negotiate a further opening up of world trade, with significant additions made to previous WTO agendas.
The agreement is all the more important in the light of recessionary trends in the United States, Europe and Japan, exacerbated by world events over the last two months. The Doha meeting took up the agenda abandoned at Seattle two years ago. A failure to agree would certainly have deepened such pessimism. Psychologically the agreement could alter international market sentiment, taken together with the prospect that the war in Afghanistan could come to a speedier end than most have expected.
As an open trading nation with a large agricultural sector Ireland has a crucial interest in these negotiations, which are targeted to conclude by January 1st, 2005. Ireland and France rejected a formula signalling that they have as their objective the "phasing out" of farm export subsidies, including those of the European Union from which both states derive substantial advantages. They were able to hold other EU states to the previously agreed mandate opposing that formulation, despite preferences elsewhere that a higher priority be given to environmental concerns. The final text says the phrase will not prejudice the outcome of negotiations on farm export subsidies. Effectively this postpones their demise for at least ten years, according to the Irish delegation. Ministers argued successfully that Ireland's economic and social reliance on agriculture and rural life makes this necessary.
That position sits uneasily with Ireland's commitment to high levels of development aid. Developing states much more reliant on agricultural exports than Ireland are frustrated by their lack of access to international markets - and find their own markets are damaged by dumping of subsidised products. Nonetheless there was progress at Doha for a number of developing states, which want the right to manufacture drugs to treat AIDS, tuberculosis or malaria without breaching WTO patent rules. Developing states will press hard for greater market access by their textile industries. They will have to negotiate on the application of environmental rules, but are not confronted with demands for stronger social ones by the Doha agreement.
The EU has a negotiating mandate on behalf of its members at the WTO. Despite overnight fears that its negotiators had achieved too little, the final outcome saw them claw back significant advantage. That is the virtue of working closely with partners in a truly global context.