Last year was supposed to be the year to "make poverty history". Rock stars sang for the poor, world leaders talked themselves into a lather of visionary empathy, and the rest of us wore surprisingly chic white wristbands. But despite all the goodwill, its time to brutally assess how well we have converted words into action before another year slips away.

Unfortunately despite the best of intentions all year, the moment of truth occurred in Hong Kong at the meeting of trade ministers organized by the World Trade Organization. This should have been the occasion to turn words into reality, and to make major changes to the world trading system, boost the world economy, and give hundreds of millions of people the opportunity to trade their way out of poverty.

Yet unfortunately, when it came to the crunch, very little of substance was achieved. This was truly a wasted opportunity because there is a lot at stake in world trade because it has the capacity to reduce poverty all over the world from Azerbaijan to Zambia. It's a global solution to a global problem and Australia is playing a leading role. In the World Trade Organization, Australia is in a key position as the chair of the Cairns Group - a negotiating coalition of 17 agricultural exporting countries including New Zealand, Canada and Brazil. The Cairns Group formed in 1986 as a lobby group to improve the lot of their own farmers by lobbying other countries to reduce their agricultural tariffs and subsidies.

While most countries in the WTO have put self-interest on the backburner in this round to make way for proposals which would help the poorest countries, the Cairns Group has stuck to its guns. If anything, Australia has been lobbying harder than ever for the US and Europe to reduce their tariffs and subsidies on agricultural goods because they have been able to claim that agricultural reform will boost farm incomes in the poorest countries. At the Commonwealth Heads of Government Meeting in November, John Howard demanded "significant movement on agricultural protection" ... "to give the developing countries a fair go". At the APEC conference earlier the same month he said "Agricultural trade is the deal-breaker for the WTO". Indeed when Howard talks about agricultural reform, he very rarely mentions the windfall gains that would fall to Australian farmers, choosing instead to cast himself as a champion of the poorest countries. This may be good politics but some of the poorest countries are starting to complain. Contrary to the claims made by the Cairns Group on their behalf, the poorest countries realize that many of them will actually be worse off if Europe and the US are forced to reduce their agricultural subsidies. The key fact is that most of the world's poorest countries are actually net importers of subsided food and the most disadvantaged people in those countries, particularly the urban poor, will suffer if the removal of subsidies forces the world price higher.

That's subsidies, but what about tariff reductions? Here again the Cairns Group doesn't really speak for the poorest countries which already benefit from generous special schemes to allow their goods to enter Europe and the US without any taxes. This means that further tariff reductions will only benefit the richer countries, and will in fact reduce the advantage these preferential special schemes currently convey to the poorest.

Australia's grandstanding on agricultural issues was shown up last year when the World Bank released estimates of the winners and losers from agricultural reform. Not surprisingly Australia and our Cairns Group allies were at the top of the list of winners. But many were surprised to see how many of the poorest countries would be left worse off. Certainly Australia should stand up for its own interests at the bargaining table but it shouldn't claim to be doing favors for the poorest countries at the same time. Global agricultural policies need to be reformed, but simply slashing tariffs and subsidies is not by itself a panacea for the poorest.

There is a broad agenda beyond agriculture that has been almost entirely ignored in this round of talks and was not progressed in Hong Kong. Tariffs on industrial goods must be cut and the set-up must be altered so that the types of goods exported by poor countries, such as processed foods, are not unfairly penalized. There is also much to gain from increasing the mobility of workers. Workers from poor countries should be allowed to carry out short-term projects in rich countries.

This would help the flexibility of the labour force and also allow workers to send part of their pay home. The flow of money from migrant workers in rich countries is a crucial source of development finance and is already greater than all the aid money that is given every year. New evidence shows that aid and trade must complement each other. For the poorest countries in the world, market access is not enough. Goods will never make their way into the market if there are no roads and ports to transport them and if the product quality is not up to scratch. On their own, tariff cuts will have little effect.

The almost exclusive focus on agriculture in current trade that Australia is pushing may not be as much help for the poor countries as it claims. Instead we should be looking more broadly for ways of helping ourselves while at the same time more genuinely helping developing countries.

Dr Andrew Charlton is a research officer at the London School of Economics and recipient of the Rhodes Scholarship. He has co-authored his new book, Fair Trade for All: How Trade Can Promote Development, coauthored with Nobel Prize Winner Joseph Stiglitz.

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A version of this article was originally published earlier this year on the Vibewire website: http://www.vibewire.net/3/