Connect with us

Hi, what are you looking for?

Capital Business
Capital Business


Deep divisions ahead of global trade talks in Nairobi

The four days of global trade talks, being held for the first time in Africa, will kick off in Nairobi on Tuesday amid predictions that chances of reaching even a limited trade deal are "gloomy"

The four days of global trade talks, being held for the first time in Africa, will kick off in Nairobi on Tuesday amid predictions that chances of reaching even a limited trade deal are “gloomy”

World Trade Organization member countries remain deeply divided ahead of a key conference in Nairobi, with some urging the organisation to abandon talks deadlocked since 2001 and start fresh.

The four days of global trade talks, being held for the first time in Africa, will kick off in Nairobi on Tuesday amid predictions that chances of reaching even a limited trade deal are “gloomy”.

On the eve of the conference, US Trade Representative Michael Froman warned that talks that started in Doha in 2001 aimed at lowering global barriers to trade had little prospect of success.

“It is time for the world to free itself from the strictures of Doha,” he wrote in an opinion piece published in the Financial Times.

His comments appear to place the United States in the company of a number of countries calling for the WTO to scrap the process and start over.

The Nairobi meeting comes two years after ministers from WTO member countries reached a landmark deal in Bali on overhauling global customs procedures.

This marked the first multilateral agreement concluded by the WTO since its inception in 1995, and also the first concrete progress since the Doha Round of trade liberalisation talks began.

But there are few signs that countries will be able build on the momentum gained in Bali to carve out even a limited deal in Nairobi.

Prospects ‘very uncertain’ 

Insiders say negotiators will focus on trying to nail down a partial deal focused on agriculture export competition and trade development in the world’s poorest nations, but admit the chances of succeeding are shaky at best.

Advertisement. Scroll to continue reading.

A source close to the WTO told AFP the intense preparations for the meeting that have been underway at the organisation’s headquarters in Geneva in recent weeks have made little headway.

EU Trade Commissioner Cecilia Malmstrom also warned the European parliament last week that “prospects for even this more limited package are very uncertain, even gloomy.”

“Developments in Geneva, have dramatically deteriorated in recent days, all but confirming that we are facing a very difficult Ministerial Conference in Nairobi,” she lamented.

French Foreign Trade Minister Matthias Fekl meanwhile cautioned the French parliament last week to expect “difficult negotiations” in Nairobi.

“I have very little hope,” that during the Nairobi conference “we will reach a broad agreement — I won’t even mention a comprehensive deal,” he said.

The 162 countries which make up the WTO set trade rules among themselves in an attempt to ensure a level playing field and spur growth by opening markets and removing trade barriers, including subsidies, excessive taxes and regulations.

But lacking progress towards fulfilling the Doha commitment has led countries to increasingly pursue bilateral or multilateral trade deals, casting a dark cloud over the relevance of the WTO.

‘Very dangerous’ 

“The upcoming ministerial conference is vital for the future of the WTO as a system,” Malmstrom insisted, warning that a lack of agreement at the conference could prove “very dangerous for the whole multilateral system.”

Advertisement. Scroll to continue reading.

A well-informed source in Geneva told AFP the meeting would be dedicated to discussing the Doha agenda, “its future, a work programme for next year, the elimination of agriculture export subsidies, and what measures to take in favour of the least advanced countries.”

The trade talks that began in Doha have been riven by a rich-poor split.

They never recovered from a collapse in negotiations in Geneva in 2008, notably because of a dispute over a provision that allows developing countries to erect protective import tariffs on farm goods.

In Nairobi, that split will remain apparent, with some countries calling for revisions of WTO’s list of developing countries and questioning their special treatment.

Froman lamented that some emerging markets have today become the biggest providers of agricultural subsidies, but are still allowed to circumvent the rules.

“If you are a poor farmer facing a global market distortion it does not matter where the subsidies causing it came from. Artificial distinctions between developed and emerging economies make no economic sense,” Froman wrote.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...