For the first time since the release of new negotiating texts on April 21, World Trade Organization director general Pascal lamy speaks on the state of play in the negotiations and whether 2011 would mark the end of road for the Doha round of trade talks. In an interview with Nayanima Basu over email, he said the aim of concluding the negotiations by 2011 was at serious risk and the ministerial meet in December would be the defining moment. Edited excerpts:
It seems the Doha round of trade talks is once again stuck. For the first time, even you went on record that the talks face ‘serious risk of failure’ due to some ‘unbridgeable gaps’. Does this mean the negotiations are fast reaching a dead-end?
I’d said we are at an impasse and prospects for a successful conclusion are at serious risk. I still detect a willingness among members to reach agreement. An agreement is still technically possible. What is clear, though, is that we cannot proceed with the attitude that it is business as usual. We need to look for new approaches to finding compromise. Some of these are already emerging but we will need political attitudes to change if we are to conclude.
Do the problem areas on tariff cuts and sectorals remains as hard as they were between the developed and developing nations since the collapse of talks in 2008?
The Easter package (new negotiating texts) that we recently tabled shows the range of areas where differences persist. My sense is that with the appropriate conditions of temperature and pressure, these differences are bridgeable through hard bargaining. But for one area, industrial tariffs, where the gap as is stands today is not bridgeable. It is a political gap, relating to the amount of the cuts in industrial tariffs to be undertaken by both developed and emerging economies.
The negotiations in industrial tariffs come in two parts. First, there are the cuts that would result from application of the general formula accepted in 2008 and then there are cuts from additional tariff reduction in specific products, what we call sectorals.
The developing countries have clearly stated their stand on sectorals and refused to take part in the negotiations. What is the current status?
Some countries believe cuts generated by the formula would not offer enough market access opportunities in large emerging markets. They say that since their own tariffs will be reduced to very low levels as a result of the formula cuts, they would not, in future rounds, have anything to bargain with in their negotiations with emerging nations. The other side says they are already, for the first time in the history of the multilateral trading system, making significant cuts in their tariffs, including their applied tariffs. They say participation in the sectoral negotiations is not mandatory and they never agreed to harmonise their industrial tariffs with those of developed countries.
How do you view the new set of negotiating texts? Do they truly reflect the so-called “progress” in the ongoing negotiations?
Yes, I do believe these texts accurately reflect where we are today. They contain no surprises. In some areas, we have made important progress of a technical nature. In other areas, we have actually produced texts for the first time. These texts take the membership closer to agreement than they have ever been. Remember, this is the first time we have been able to produce a complete picture of the negotiations. This document represents the 10 years of collective effort. Governments can see the full horizon and where they might be able to make trade-offs across sectors that would result in complete accord in the round. They can also see where they need to apply themselves if agreement is going to be reached.
What has been the reaction of developing countries on the new draft texts? Do you think it is tilted towards the developed countries’ demand?
The responses so far to the Easter package we presented have been sober, because the entire membership understands we are at an impasse and that the round is at stake. The texts have been produced through a bottom-up process and, therefore, contain no surprises. They are a faithful representation of where members are. In areas where work has produced progress, this is reflected. In those areas where progress has been difficult to achieve, the chairs of the negotiating groups have reflected this as well. Every member has difficulty with some elements of these documents, but I have heard no country say the Easter documents are tilted one way or another.
What do you expect to emerge out of the informal talks scheduled to take place on the sidelines of the OECD meet?
Let us see.
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Is it not high time a full-fledged ministerial round should be called of all the 153 members to hammer out a deal?
I will not call Ministers to Geneva unless I think there is a realistic chance that the meeting would succeed. Ministers themselves have said the same thing, including in Davos in January. Until we are in a position where the remaining differences are a manageable few and the really tough political issues can be settled through intense negotiations, calling ministers to Geneva doesn't make a lot of sense. Ministers will come to Geneva for our regular Ministerial Conference from December 13-15. This will be a defining moment.
Now that half of 2011 is almost over, do you still think 2011 is achievable?
As I said, profound and deep political differences have put the conclusion of the negotiations by the end of the year at serious risk.