Five days of negotiations in the mid-term review of the latest world trade talks get underway in Cancun, Mexico today.
The meeting is a key milestone in the so-called Doha development round, due to conclude at the end of next year under the auspices of the World Trade Organisation (WTO). For the talks to conclude on time, progress must be made this week on the main issues.The mid-term talks come at a delicate time for international economic relations. The US has stated its commitment to the multilateral trade process, but if this falters it has said it will turn its attention to bilateral deals. Many EU countries, including Ireland, appear more focused on defending existing trade barriers than on the goal of a successful round. Meanwhile many of the developing countries are arguing strongly that the talks must live up to the title of the "development round" and that the richer countries must lead the way by opening their own markets.
The talks will be difficult and there is a risk, if not of a complete breakdown, at least of an outcome which effectively stalls the negotiations. For this to be avoided, all sides must be prepared to engage in genuine negotiations, recognising the mutual gains from freer trade and the potentially high price of failure.
Many of the developing countries complain, with considerable justification, that the current international trading system is biased against them. They are correct that the current round should do much to open new markets to their exporters. This week's talks will give a good indication of whether the richer countries are willing to do this. In return developing countries will come under pressure to continue opening their markets.
The overall goal is continued growth in world trade, policed by the WTO under the multilateral system. The alternative - if the current round fails - is not clear, but would probably involve countries seeking bilateral agreements. Failure would also damage economic confidence and threaten increased trade disputes and possibly even rising tariff barriers. This would seriously damage the world economy.
For Ireland, a small open exporting economy, the talks have a clear importance. Our prosperity depends on continued growth in world trade and the associated investment flows. The outcome of the talks is also crucial for our agricultural sector and for parts of our food industry which rely on the CAP. As they participate in the EU negotiating group, the Irish ministers face the difficult task of balancing the importance of the talks for agriculture with the imperative of a successful trade round for our export-reliant economy.