ICC deeply regrets the failure announced last night of the key ministerial meeting in Geneva intended to arrive at agreed modalities for agricultural and manufacturing products as part of the long-drawn-out Doha Round of multilateral trade negotiations.
  

“There is no alternative to the rules-based multilateral trading system, which the Doha Round seeks to strengthen,” said ICC Chairman Victor K. Fung. “It is particularly important in this economic environment to continue to foster world prosperity and encourage the growth of developing economies who will be the biggest losers if the Doha Round were to fail. Governments must continue to talk,” he added. Mr Fung is also Chairman of the Li & Fung Group of companies, with major subsidiaries in trading, distribution and retailing.

In international trade, as in so many other policy areas in today’s interdependent world economy, national governments apparently still have not fully realized the importance of international cooperation to tackle major challenges which transcend national boundaries and which they are increasingly unable to resolve by acting alone.

“Clearly, not enough member countries of the World Trade Organization (WTO) were ready to make the compromises necessary to reach a deal – even after 6½ years of talks,” said ICC Secretary General Guy Sebban.

ICC, representing business in all parts of the world, believes that this major set-back is very bad news for the world economy at a time when growth is slowing sharply in many countries as a consequence of the financial crisis.

“There is no question in our minds about the effects of the Doha Round on the global economy. Without a Doha deal, virtually all countries will experience less economic growth than they would if a Doha deal was in place,” said Mr Sebban.

With the world besieged by huge international challenges such as climate change, energy shortages, and an explosion of food prices, it is particularly disturbing that governments could not work together successfully to expand multilateral commercial ties that raise living standards. They will regret it in the medium term – including those governments who have blocked progress under pressure from politically influential vested interest groups.

ICC hopes that this week’s failure in Geneva will not mean the end of the Doha Round. Political circumstances do not appear in favour of completing the Round for the time being – but that may well change after a period of experiencing and reflecting on the economic and political consequences.

In the meantime, ICC cannot overstate the vital importance of preserving and respecting the body of multilateral trading rules enforced through the WTO which have been laboriously developed over the past 60 years and which have proved so effective in raising living standards throughout the world.