The Doha Round of negotiations of the World Trade Organisation (WTO) continues to disappoint. Member countries driven by domestic considerations are repeatedly failing to come up with concrete progress on any issue.
The latest in the series of setbacks to the Round has been the fact that negotiations for the last two months on a minimalist deliverable for the Ministerial meeting in Geneva in December 2011 is floundering with countries unable to arrive at a consensus on what should be the final list of issues for discussion and agreement at the Ministerial.
There had earlier been a broad consensus on having some of the important issues concerning least developed countries (LDCs) on the list of deliverables for December, but reports suggest that even that is not moving forward. The set of issues on the table included duty free quota free (DFQF) access for a negotiated list of LDC products, simplified rules of origin for these countries, a waiver from commitments in the services sector and a step forward on the issue of cotton.
The current deadlock has prompted the director general of the WTO, Pascal Lamy, to comment at the Trade Negotiations Committee (TNC) in end July that countries will have to get back in September after the August recess to engage in “adult conversation” on “what next”.
This is not the first time Lamy has berated members to get serious. So why then are members reluctant to move forward on their positions on nearly all issues being discussed under the Doha Round?
To find answers we may need to take a close look at two members – the US and the European Union (EU) – who have in the past been the main leaders to move the multilateral process of negotiations forward. Both these players are today acutely engaged in sorting domestic problems rather than playing a serious role at the WTO.
The US is facing a problem of low economic growth coupled with a drought in the southern states ranging from Arizona to Florida. Cotton and wheat have been hit badly by the drought and reports say 60 per cent of the cotton crop in Texas, the second-largest cotton grower in the US has been hurt. Data released by the Commerce Department recently also showed that the economy has been performing below expected levels and recovery will take longer than expected since the just-over recession was deeper than estimated. Given this backdrop and the difficult negotiations President Barack Obama may need to get Congress approvals, if needed, will mean that the US may be a reluctant starter.
The EU has been battling a credit crisis for the past several months making it pertinent for the Union to seek higher market openings in what it considers are emerging markets with large growth rates. Spain and Italy, which contribute to two-thirds of the Euro zone economy, are also battling indebtedness. On the other hand, strong countries like Germany are looking outside the region to invest and grow. Germany is collaborating with countries like China and Russia to build its strong economy by investing and trading more with developing countries with higher growth rates. Both, Beijing and Moscow have led strong industry delegations to Germany to capitalise on this sentiment.
However, for developing countries like India, China and Brazil a need to pursue inclusive growth targets at home will mean that they cannot abandon a Development Round agenda at the WTO and accept the growing demands of the developed world to provide higher market access than what was originally envisioned when the Round was launched.
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Given this backdrop, it is getting clear that a balanced development agenda is difficult to meet. To bring people back to the table for some serious negotiations there is a need for some confidence building exercise in the Doha Round. It is important to note that most negotiations have been moving targets. Countries have not stuck to original proposals for negotiations. This is evident in negotiations on reduction of industrial tariffs where members like the US and the EU have introduced new issues like zero-for-zero or now a standstill on tariffs.
There is a need for members to reflect on what is achievable and what is needed to ensure that members regain their confidence in a multilateral process of negotiations.
The author is Principal Adviser with APJ-SLG Law Offices