Barry Coates: Time for some ethics in trade deals

In Hong Kong, Oxfam was giving out fortune cookies to stressed trade delegates. Inside was a message "Don't let the trade talks crumble: make trade fair."

Maybe we were tempting fate, because our predictions didn't come true.

There had been a big build-up to the World Trade Organisation ministerial meeting . More than 17 million people signed the Make Trade Fair petition that was presented to the New Zealand minister, Jim Sutton, by Neil Finn at Auckland airport.

And millions more people had been mobilised through the Make Poverty History campaign around the world.

Meanwhile, Governments made promises that this would be a development round of trade talks, focusing on reforming the unfair agricultural trade rules that contribute to poverty among the 96 per cent of farmers who live in the developing world.

But in Hong Kong, things got worse. The rich countries arrived with promises of giving the poor countries "a trade round for free", but in negotiations behind closed doors they used all their negotiating power to get the round for free for themselves.

Instead of offering to end agricultural dumping, the EU and US instead demanded huge cuts in developing country tariffs and opening up of their services sectors.

Usually in these WTO talks, the rich countries are able to divide and rule, picking off individual countries with special deals.

This time, the developing country Governments were able to fend off most of the demands that would have undermined their development prospects and prevented them from using the same kind of policies that the rich nations and Asian tiger economies used to promote their domestic industries during their development.

But the developing countries were forced to defend their interests rather than focusing on the agriculture issues where reform is so badly needed to reduce poverty.

The New Zealand Government position was to press for agriculture reform, recognising that our farmers would also benefit from an end to trade-distorting subsidies, but they wanted developing countries to pay for it. They joined the EU and US to mount pressure on developing countries.

As in other trade negotiations, a few commercial gains for New Zealand exporters took precedence over Government policy aims to support development, defend the multilateral system and forge longer term relationships with trading partners in Asia.

By the end of the conference, developing countries had to give up a huge amount to get a promise from the EU to end only 3.5 per cent of their agricultural subsidies in eight years time. They either had to accept or walk out, risking the survival of the Doha round and even the multilateral trade system.

They accepted, but with bitterness and frustration.

It is time for the New Zealand Government to stop cosying up to the rich nations to get special deals, and instead start to defend the multilateral trade system from abuses of power and gross imbalances in trade rules.

It is time to look towards our future. Don't let our ethics crumble: make trade fair.

* Barry Coates is executive director of Oxfam New Zealand.