Monday, December 15, 2008

WTO drops plans for end-2008 Doha meeting

With the G20 nations caught up in the ailing economy, who will remember the third world countries, countries that the IFIs had pledged to assist?


Source: Reuters

By Jonathan Lynn

World Trade Organisation (WTO) Director-General Pascal Lamy has dropped plans for a meeting of ministers to seek a breakthrough this month in its Doha round.

It is the second setback in six months for the seven-year-old round, after the collapse of a meeting in July.

Below are some possible consequences of the decision:


* Many WTO members have the possibility of unilaterally raising tariffs and subsidies from current lower levels to what was negotiated in the last trade round, signed in 1994, or when they joined the WTO.

* Some have already started to do that and, as jobs come under pressure, more will follow. So even if an all-out trade war is unlikely, a protectionist rise in tariffs is on the cards. Doing nothing now could see the clock turn back 10 or 15 years.

* Global trade flows are already slowing and on some counts shrinking, along with the world economy. They are likely to contract next year, squeezed further by the tariff moves.

* Some countries will seek more bilateral or regional free-trade deals to replace Doha -- but those often divert trade rather than creating new flows.

* Trade contraction is bad news for all economies. For the United States exports have been one of the few bright spots. China and other Asian countries seeking to modernise through export-led growth risk social and political turmoil if their economies slow.

* One response to slowing exports could be competitive devaluations, especially by developing countries.


* A meeting of ministers on Doha has now been put back well into 2009. An idea of next steps should come from the WTO's General Council on Dec. 18-19.

* One option would be for countries to impose a moratorium on tariff and subsidy increases for the duration of the recession as they continue to work on the Doha round.

* But reaching a deal next year will be much harder than now -- the momentum and goodwill that built up around the July meeting will be dissipated, and the state of the world economy will be much less favourable.

* In contrast to July, when there was no blame game, recriminations are likely this time. Since the main stumbling blocks touched on key U.S. interests, the United States can expect to be in the firing line when the finger-pointing begins. That will sour the atmosphere for future talks.

* The new U.S. administration of President-elect Barack Obama taking office on Jan. 20 may take time to get to Doha as it deals with other priorities. And then it may want to revisit what has already been tentatively negotiated.

* A new EU Commission in 2009 and national elections in India in the first half of next year will affect decision-making in two of the biggest trade players.

* More voices will be raised saying the world has changed since the Doha round was launched in the Qatari capital in 2001. They will argue the round should be dropped and new negotiations should start reflecting new priorities such as the economic crisis, food security and the climate change.


* Expect a big increase in trade disputes at the WTO as members turn to litigation from the negotiating table.

* Many of these will turn on "dumping" -- where imports are sold for less than they cost at home. China could be a particular target for the United States and EU members.

* The WTO is also going to have to spend more time ruling on the legality of subsidies, as countries bail out industrial sectors hurt by the crisis

* But the credibility of the body that umpires world trade will suffer. The vast majority of its 153 members wanted a deal, and leaders of the G20 rich and emerging nations had called for an outline agreement by the end of this year


* As a result the G20 has failed the first big test of its ambition to create a new global governance system replacing the G7 rich countries. The WTO decision comes less than a month after the G20 called for a trade deal this year.

* If the United States takes much of the blame for the failure, it will increase pressure on Obama to prove his multilateral credentials.

Labels: ,

Thursday, December 11, 2008

In Greece, Protests Echo European Students' Ire

A 15 year old student had been shot in the stomach by policeman on Saturday 6th of December at 9pm. This is the extreme expression of police brutality spreading in the last few years across mobilizations of any description, of students, workers, migrants, peasants, women, antifascist and ecological movements.


Source: The Wall Street Journal

Thousands of students were joined by striking workers in a fifth day of protests in Greece, an uprising that mirrors growing discontent among youths in many European countries over outdated education systems, lack of jobs and a general apprehension about the future.

From Rome to Berlin to Madrid, young people graduate from university much later than their peers in Northern Europe, the U.S. or U.K. When they do, they struggle to find long-term jobs with social-security benefits.

In Germany, many young people - including large numbers of university graduates - have struggled in recent years to find employment that pays a full wage. Instead, they have found themselves working as interns for no or low pay for long periods. German media have dubbed such economically insecure young people "Generation Intern."

In Spain, a generation of young people is entering the workplace with few benefits or protections, often moving between temporary contracts so that employers can avoid the country's onerous employment laws. The media have dubbed them "mileuristas" - loosely, those who scrape by on a thousand euros a month. In Greece, this same group has been dubbed "Generation 600" -- referring to the country's national minimum wage of €600 (about $776) a month.

French students are planning a nationwide protest against government plans aimed at giving state universities more autonomy in managing their budgets. Students fear this will create a two-tier system, with wealthy campuses attracting private funds and poorer colleges languishing. Three years ago, French students took to the streets to protest the "precarious" nature of a new temporary job contract the government was trying to introduce.

Last month, thousands of Italian students took to the streets to protest the government's attempt to change laws governing the entire school system, including cutting budgets for state universities.

The backdrop for Wednesday's demonstrations was a general strike - planned by unions before rioting started Saturday - to protest the conservative government's economic policies, including changes to pension laws and privatizations.

Thousands of high-school and university students walked out of class and joined the demonstrations to protest their discontent with the government's higher-education and employment policies.

"For decades, Greeks have been pursuing the American dream: plenty of money, nice cars," said Eleanna Horiti, 42, an Athens architect. "But for Greek teenagers, the American dream has now vanished."

The Greek economy has enjoyed a decade of rapid expansion and is expected to grow about 2% next year. But one lingering dark spot is unemployment among young people.

Some 25% of Greeks 15 to 24 years of age are unemployed, meaning the benefits of the country's economic expansion haven't been equally distributed, said Claude Giorno, an economist at the Organization for Economic Cooperation and Development.

Meanwhile, many students can't get into Greece's highly selective state universities and are forced to go abroad or to local branches of foreign universities, said Achilles Kanellopoulos, dean and CEO of the American University of Athens. The problem, he said, is that in most instances the Greek state recognizes only state universities. "It's unfair," he said.

Alexander Kitroeff, associate professor in history at Haverford College, said the length of protests among high-school and college students is particularly striking because it is an age group that hasn't been politically active since the early 1980s. But now, he said, "they feel that they're not getting jobs and that they don't have the same opportunities" of earlier generations.

The clashes across Greece were set off over the weekend after the fatal shooting by police of a 15-year-old boy during an altercation. A Greek court Wednesday ordered that two policemen be held in jail pending trial for the shooting. One was charged with murder.

As the protests continued Wednesday, Greek Prime Minister Costas Karamanlis called for calm and announced a string of financial support measures for businesses damaged in the rioting.

"The government is determined not only to make citizens feel safe but to support businesses which suffered damage," Mr. Karamanlis said in a televised message, announcing a string of subsidies, soft loans and tax-relief measures for those whose property had been damaged.

Mr. Karamanlis's center-right government - which has a one-seat majority in parliament - was already trailing in public opinion polls before the riots. George Papandreou, the leader of the main opposition Panhellenic Socialist Movement, has called for early elections.

Labels: , , , ,