Doha, Qatar, has been in the news more in the last two weeks than in all of its history before. It is not only the headquarters of America's Central Command for the war on Iraq, but it is also the home of the Arabic-language news network al-Jazeera. Yet, the big news to come out of Doha this week might not have anything to do with the war or with its reporting. Instead, the failure of WTO negotiations on global agricultural trade may mean as much as the war, and to some developing states, even more.
Last Monday's deadline to get some kind of a deal passed without any agreement because the Cairns group of nations (more or less a bunch of free-trade states including the US and Australia) couldn't crack Europe's Common Agricultural Policy. The result will be deadlock on world trade in general for several months in addition to extended poverty and suffering in the developing world.
Economics teaches that trade between nations follows comparative advantage; that is, even if Italy is better at growing food than Turkey, the latter should export food rather than sports cars because the former has even greater advantages in the automotive industry. What that means is that countries with almost no manufacturing base should develop by agricultural growth, exporting their products to places where bashing metal and crunching bytes generates incomes.
So far so good, until Europe's CAP raises its subsidy-laden head. By overpaying European farmers, they produce surpluses of just about everything (the infamous wine lakes and butter mountains come to mind), and this drives down prices for such goods -- cutting incomes of the poorest nations.
Fifty years ago, this "protection of traditional farms" argument might have worked, but now, all the CAP achieves is permanent poverty for Third World farmers, permanent entitlement to relatively well-off farmers in Europe, and a tax bill European manufacturers pay through higher unemployment across the continent. A lose-lose situation if ever there was one -- and no changes coming any time soon.