Multilateral trade deal may elude WTO, again

Gaps are already visible in the decision to introduce yet another round of negotiating texts for all sectors

All the 153 member countries of the World Trade Organization (WTO) have vowed to intensify the talks to achieve a multilateral trade deal by 2011. But, wide gaps are already visible in the decision to introduce yet another round of negotiating texts for all sectors. Even as developing countries have not objected to the idea, they have warned against any shift from the development agenda.

The revised drafts are expected to be introduced by the end of April. After that, there could be a full-fledged ministerial round for all members by July, officials involved in the negotiations in the commerce and industry ministry told Business Standard.

Key developing countries like India, China, Brazil and South Africa have strongly warned against drifting from the development agenda, based on which the current round of talks had been kickstarted in Doha in November 2001.

“As long as the new texts do not open any drift from the developing agenda, India has no objections to the issuance of the new texts,” said a senior commerce department official who did not wish to be named.

The texts circulated in December 2008 have so far formed the basis of talks. However, with the change of guard in the US in 2009, the new administration has been constantly pushing for new set of texts, as it feels the present texts do not offer much to the developed countries in terms of greater access to emerging markets and more leeway in sectorals.

“The revised negotiating texts must not alter the two most important critical points. First, they must adhere to the Doha mandate and not try to change or dilute the development dimension. Second, they should significantly help build fresh momentum in Doha talks,” said Manab Majumdar, assistant secretary-general, Federation of Indian Chambers of Commerce and Industry.

Last month, chief trade negotiators and ambassadors from the US, EU, Australia, China, India, Brazil, Japan, Canada, South Africa and Argentina met in Geneva in an effort to reduce the number of differences among countries and lower the number of square brackets, as referred to in trade parlance.

“Acceleration, texts and convergence are now the name of the game. Work is on to develop draft language and textual proposals as well as to remove brackets. We urgently need to build on good atmospherics to accelerate negotiations at all levels, if we are to record substantial progress across the board by the summer break,” said WTO Director-General Pascal Lamy while concluding the last Trade Negotiations Committee (TNC) meeting.

Lamy recently reported to the General Council that he was encouraged by recent discussions among senior officials, but warned that “a major acceleration at all levels — multilaterally, plurilaterally and bilaterally — is needed”. He had added that “the window of opportunity is still there, but it is narrowing everyday”.

During the meeting, Lamy also urged countries to intensify the process while directing the chairs on agriculture, non-agricultural market access (Nama), services and rules to circulate new texts that would reflect some of the significant progress made so far since the talks failed in 2008.

“These texts would make sense if they come out without many square brackets. It can then provide the much-needed momentum to complete the round at the earliest. India has been engaging positively in the negotiations and has shown tremendous leadership in moving the Round ahead. New texts should be fine for India as long as they reflect the interests of developing countries, as espoused by New Delhi during these negotiations,” highlighted T S Vishwanath, principal advisor, APJ-SLG Law Offices.

According to WTO Deputy Director-General Harsha Vardhana Singh, the negotiating process has intensified and there is much greater engagement among the members now. He said key members had given political emphasis at the highest level to bringing the Doha round to a successful conclusion in an “ambitious, comprehensive and balanced way, recognising 2011 as the critical window of opportunity.”

So far, the round has missed several deadlines over the failure of countries to reach a consensus on the development agenda, which stipulated removal of distortions that plague global trade at present. The Doha Development Agenda was meant to help poorer countries export more of their produce by getting greater entry into the developed markets. However, over these 10 years, talks have shrunk only to tariff cuts.

Even the last TNC meeting failed to achieve any significant progress. Some trade experts and analysts believe 2011 looks implausible due to sluggish recovery in developed countries after the 2008 financial meltdown.

“There are a number of crises that have become increasingly acute in recent years, especially since the 2008-09 slowdown. They are not all directly related to Doha, but they are global issues that stand much better prospects of being addressed in a world working in collaboration than a world engaged in conflict; in a globalising world rather than a deglobalising world,” said Jean-Pierre Lehmann, professor of international political economy and founding director, The Evian Group.

Anwarul Hoda of the Indian Council for Research on International Economic Relations expressed concerns over the slow progress of the talks. “The US continued to harp on the demand on Brazil, China and India for additional concessions in non-agricultural market access and appeared inclined to reopen the chairman’s text in agriculture on issues that were being regarded as settled. There was no inkling of the commencement of the endgame, when delegations can be expected to start the process of give and take and move from the position of reiterating previously stated positions,” said Hoda.

 

THE STORY SO FAR

# 1996 (Singapore): First WTO ministerial conference held in December

# 1998 (Geneva): Countries committed to adhere to recommendations, based on the programme initiated at Singapore

# 1999 (Seattle): The then WTO director-general, Mike Moore, urged to continue of talks and address challenges that WTO was facing

# 2001 (Doha): Members agreed to work on an expanded work programme and decided to liberalise trade in agriculture, services, non-agricultural products, TRIPS. The Doha Development Agenda (DDA) was conceived

# 2003 (Cancun): Talks failed to conclude the deal, as rich countries refused to reduce trade-distorting subsidies, while the poorer nations denied developed countries more access in their markets. This ministerial round was marked by huge opposition by NGOs and civil society bodies of tariff reduction

# 2005 (Hong Kong): Countries met after a long time to re-assert their commitment to DDA, which stipulated trade liberalisation so that developing nations could export more of their products to rich countries

# 2009 (Geneva): Countries missed yet another deadline to seal the deal and agreed to close it by 2010. This could not be achieved. Now, countries have agreed to complete the deal by 2011. G-20 leaders call it the ‘last window of opportunity’