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WTO parley ends on high note of op timism

In six days of nearly round-the-clock meetings in this Persian Gulf emirate, the members of the World Trade Organization sought to balance their national interests against the urgent need to shore up the world's battered economy. Their success helped to dispel some of the psychological damage inflicted by the collapse of similar talks in Seattle two years ago.

With trade growing at the slowest rate since the early 1980s and the world economy on the brink of recession, negotiators were under intense pressure to act together to stimulate growth. The World Bank estimates that the outline agreed upon yesterday could help add $2.8 trillion to global economic activity by 2015.

"This agreement sent a powerful signal to the world that we have removed the stain of Seattle," Robert Zoellick, the U.S. trade representative, told delegates as the meeting concluded. "We will continue to build a common trading system based on common rules."

Developing nations made out well because the agreement was likely to open markets in industrial countries to their leading exports. It will also open doors for multinational corporations, especially those that provide financial and environmental services, and for agriculture exports.

But if the full extent of the accord is realized in forthcoming negotiations, it could hurt special-interest groups around the world that have long enjoyed direct government support for the ability to use domestic rules to limit imports.

Among the biggest are U.S. textiles, steel and semiconductor companies, as well as small European and Japanese farmers. Long-standing demands by organized labor to have worker rights addressed in trade talks were largely ignored.

Many ministers said the agreement was designed mainly to benefit developing countries, which have complained bitterly that trade rules favor the rich but have begun to hold huge sway within the trade group.

Among their major gains was an understanding that would help poor countries gain access to less-expensive generic drugs to treat AIDS, malaria, tuberculosis and other diseases, even at the risk of breaking patents held by major drug companies. This understanding was reached on Monday, after the United States and several African nations declared that patents would not stand in the way of public health.

Speaking of the overall outcome of the talks, Nigeria's commerce minister, Mustafa Bello, said, "This has not been an easy negotiation, but Africa wishes to put on the record that it is satisfied and it approves this declaration."

The WTO also passed a significant milestone when it admitted China and Taiwan as its 143rd and 144th members, meaning that its membership now covers all the major industrial and developing countries with the exception of Russia.

Removing barriers to farm trade was arguably the most significant and certainly the hardest-fought element of the agreement. The United States, Australia, Brazil and many poor countries who feel they have a comparative advantage in farm exports have lobbied for years to cut tariffs and trade-distorting payments for farmers.

Their targets have for years been the European Union, Japan and South Korea, which rigorously shield farmers from foreign competition. Japan reluctantly committed to negotiating reductions in its sky-high tariffs during the latest talks, but Europe refused to eliminate some $4 billion in annual payments it makes to farmers to promote exports.

The pending presidential elections in France, where the farm lobby is strong and farm policies are equated with the French way of life, made the negotiations especially sensitive.

Though the French threatened to make the issue a "deal breaker," France and the European Union agreed to "phasing out" the subsidies. But Europeans added a bit of diplomatic double-speak, suggesting that the goals should not "prejudice the outcome" of negotiations.

Even after the success here, doubts remained about the effectiveness of the WTO. It operates by consensus, meaning individual members can hold the group hostage. The negotiating program had to be watered down so much to obtain agreement that one Japanese trade official called the delicately constructed declaration "a perfect balance of unhappiness."

But there is no doubt that the fate of the trade body would have fared worse had the talks failed. Michael Moore, the organization's director general, thanked delegates last night for "saving the WTO."