The World Trade Organisation (WTO), the international body governing rules of trade between nations, has warned that in case the ongoing Doha round of the global trade talks fails, it could have an adverse impact on the parallel multilateral discussions on mitigating climate change and financial crisis.
“If multilateral co-operation cannot obtain mutually acceptable solutions in these (Doha) negotiations, getting success on other more cumbersome issues will be even more difficult because these issues, such as climate change or financial crisis, are more complex and involve much greater collaborative understanding and assistance,” said Harsha V Singh, deputy director-general, WTO.
Singh was speaking on the importance of Doha negotiations at an industry gathering organised by the Federation of Indian Chambers of Commerce and Industry (Ficci). “Since the key entities in all these multilateral efforts are common, if they are able to walk the last mile in the Doha negotiations, the greater willingness to address each others’ concerns will contribute positively to other discussions also,” he said.
The Doha round seeks to cut tariffs as well as unfair subsidies and rules. However, it has been stalled since July 2008 over issues like cutting down subsidies enjoyed by cotton farmers in developed countries as well as a trigger mechanism to protect surge in farm imports in developing countries like India.
Singh, reiterating the need for multilateral negotiations to face global challenges, warned that there are “a number of countries or group of countries which have the possibility of blocking the agreement”. He, however, did not name any group.
He said the Doha negotiations were important for dealing with issues of tariff escalation on exports of developing countries and agricultural subsidies provided by developed countries. He also said that the Doha round talks included discussions on these policies as they resulted in non-level playing field for developing countries.
“There is a new discipline in terms of overall trade distorting support (OTDS). The current Doha round package will result in bound OTDS reductions by 80 per cent for European Commission, 75 per cent for Japan and 70 per cent for the US,” he said, adding that export subsidies on agriculture would be phased out by 2013.
Singh also said that the Doha talks would also eliminate concerns of tariff escalation against products of export interest for developing countries. “For industrial products, the accepted position by developed countries under the non-agricultural market access (NAMA) is that all their tariffs will be less than 8 per cent.”
The move would result in decreased tariffs for a number of items like tropical products. This would help India as such products account for around a third of its top 50 agriculture export items.
The Doha negotiation would also mark the changing global political economy due to growing economic importance of countries like China, Brazil and India, according to the WTO official. Also, the talks are expected to provide trade flexibilities to developing countries as “developed countries take greater obligations than developing countries” in the negotiation.
