Trade ministers from around the globe are meeting for the first time in two years this week in Geneva in what some commentators see as a last-ditch attempt to push the long-stalled Doha round of multilateral trade liberalisation talks toward a successful conclusion.

At an earlier meeting of World Trade Organisation ambassadors on June 27, WTO Secretary-General Pascal Lamy said “a maximum effort from everyone” would be needed to ensure that the ministerial meeting at WTO headquarters during the week of July 21 could lead to a breakthrough in the seven-year drive to cut industrial tariffs and agricultural subsidies.

Press reports said that Lamy hopes to wrap up a final deal by the end of 2008, before a new president takes office in the United States and changes in leadership occur at European institutions. However, differences remain among WTO’s 152 member nations on two key unresolved issues: market access for industrial products and agricultural trade.

Like previous WTO trade talks, this week’s talks are likely to flounder on the issue of the EU and the US not offering enough concessions on agriculture. The EU countries and the US give huge subsidies to their farmers, making it virtually impossible for farmers in developing nations to compete for markets for their produce in the rich countries.

These subsidies currently total a staggering $ 350 billion a year, or seven times the total amount of aid given by the rich nations to the developing countries.

A new agreement on agriculture is central to any new global trade deal being achieved. For developing nations, however, free trade is not the same thing as fair trade.

The current WTO version of free trade has in fact had the effect of making many poor nations poorer, because it has failed to address many of the major problems plaguing developing nations, including the core problem of poverty. A billion people still liver on a per capita income of less than a dollar a day; another billion live on a per capita income of less than two dollars a day. That’s two billion people – or nearly one-third of the world’s population – living below the poverty line.

The Millennium Development Goals, agreed at a UN summit in 2000, seek to halve world poverty by the year 2015. With over seven years of that 15-year time frame already gone, the world is no closer today to meeting the millennium goals than it was in 2000.

Adequate infrastructure, well employed, not only promotes economic growth but also enhances living standards. But in many developing nations the infrastructure is poor. In Bangladesh, for example, the railway and road networks are not only inadequate but also in a poor state of maintenance. Inland waterways, which are an important means of transport, are insufficiently developed. Energy consumption is low at less than 50 kilograms of coal equivalent per capita. Only about 15 per cent of the villages have access to electricity.

India’s infrastructure, too, is in a very poor condition – all the hype about the IT revolution notwithstanding. The state of the roads is very bad. Much of the huge railway network is falling apart and horrific train accidents have become increasingly common. Adequate housing is in chronic short supply and tens of millions of people in the cities sleep on the streets. Tens of thousands of villages are still without electricity. Loss of forest cover and poaching has wiped out most wildlife. Many rivers and streams are choked with toxic waste and other pollutants. Even Bombay, India’s richest city, increasingly resembles a gigantic slum.

Pakistan’s infrastructure, though in a relatively better shape than India’s and Bangladesh’s, is nothing to write home about either. The railways have been losing money for years and the quality of train services has deteriorated sharply over the last three decades. More than 90,000 villages have been electrified since 1958, but 30,000 others are still without electricity. Billions of rupees have been spent on motorway projects in the last fifteen years, but thousands of kilometres of other roads continue to be very poorly maintained. More than 200 million gallons of untreated sewage flows into Karachi harbour every day and the Lyari River now enjoys the dubious distinction of being the most polluted river in the world.

As co-authors Philip Kotler, Somkid Jatuspripitak and Suvit Maesincee note in their study “The Marketing of Nations”, developing economies are victims of a vicious cycle. A severe fiscal crisis plagues governments bedevilled by chronic and huge budget deficits. These deficits partly came from the bankruptcy of state-owned enterprises, ill-considered increases in social spending, and over-growth of the public sector. To sustain the deficits, these governments incurred heavy debt burdens. This forced them to cut back sharply on investment in both physical and social infrastructure. The poor infrastructure leads to low investment formation. This, in turn, leads to low wages and low employment rates, which lead to low consumption and poor motivation. These last two result in low productivity.

As the authors of the study note, poor productivity, in turn, means poor profits which, on the one hand, will discourage potential investors from investing more, and on the other hand, affect the revenue received by the government. Diminished government revenues mean that only a slim budget can be assigned to build up the nation’s infrastructure. The authors of the study argue that this catastrophic cycle will continue unless an effective wealth-building strategy is applied to rescue the economy as a whole.

Ironically, high growth also leads to infrastructure problems. In high-growth developing nations, congestion has become an increasingly punishing tax on business and leisure. In Bangkok, the high rate of unmanaged growth threatens to throttle further growth. Because the supply of infrastructure has failed to keep pace with the demands placed upon it, the capacity of the city has come under increasing strain in recent years.

The four major problems plaguing developing nations – low living standards, high population growth, lack of jobs, and inadequate infrastructure – are the result of more fundamental forces that are producing discontinuities in global affairs. The authors of the “Marketing of Nations” study note that at least six forces can be identified: (1) global interdependence; (2) protectionism and growing economic blocs; (3) transnationalisation of multinational corporations (MNCs); (4) rapid technological advances; (5) conflicting politics and tribalism; and (6) growth of environmental concerns.

Since World War II, the international economic system has evolved into a global economy – an interdependent system of trade, investment and development that connects nearly all regions of the world. The rules of the game are typically established and altered by both bilateral and multilateral negotiations and agreements among companies, industries, nations and regions. As the authors of the study note, multiplicities of opportunities and threats are derived from cooperation and collaboration on the one hand and competition and conflict on the other. Global interdependence thus increasingly results in ad hoc alliances.

“Under global interdependence, the worse choice that a country can make is autarchy (self-sufficiency),” the authors of the study argue. No country can make everything it needs; it must import the things that are better or cheaper from elsewhere. And it needs to pay for these imports with goods that it can export as a result of making these items cheaper or better.”

At the same time that tariffs are being reduced as part of the WTO global trade regime established under the 1994 Treaty of Marakesh, the number of non-tariff barriers has grown rapidly since the mid-1970s and has now become more important than tariffs as an impediment to international trade.

As the authors of the study note, there are various forms of non-tariff barriers, ranging from import licensing requirements that may be applied in a discriminatory fashion, to import quotas, to a variety of surveillance practices, quarantines, and arbitrary requirements and standards, to outright prohibitions against the exports of a particular nation (sanctions). Ironically, tariffs are preferred to non-tariff barriers in that they simply tax imports rather than artificially limit them.

Economic blocs also represent a form of protectionism. While liberalisation in the WTO regime is generally applied on a most-favoured-nation basis, economic blocs explicitly discriminate against the rest of the world by providing trade preferential arrangements only to the member states. Presently, there are more than one hundred regional blocs in existence.