Back on track

The framework accord hammered out at the World Trade Organisation (WTO) General Council meeting at Geneva on Saturday has managed to salvage the Doha development agenda, which seemed headed for the dustbin of failed negotiations after the collapse of the Cancun ministerial meet. The developing countries are, by and large, happy that they have been able to force the US and EU to agree to eliminate export subsidies and other trade-distorting government support for farm goods. Though the period over which this is to be done is not specified and will presumably be negotiated, there is a "down payment" clause that would require a 20 per cent cut in the maximum permitted payments immediately after the final deal is struck.

The developing country bloc is glad also about some other crucial concessions, such as continuing special and differential treatment and the freedom to identify sensitive items for exemption from market access, according to their domestic livelihood, food and rural development concerns. Moreover, the developing countries will get more time for implementing whatever changes in the trade regime are finally agreed to, while the least developed countries will be totally exempt from the agreed tariff cuts.

In turn, the rich countries have succeeded in impelling the developing countries to agree to tariff reductions in general and putting on the negotiation table the topic of trade facilitation, one of the four Singapore issues which these nations had hitherto been strongly opposing. Also, while in the case of reductions in the tariffs on farm goods, the developing countries' plea for the biggest cuts in the highest tariffs has been upheld, no figures have been mentioned. Besides, the tariffs on industrial goods are to be cut according to a formula that is yet to be worked out. Expect more hard negotiations in the months to come.

India has played a significant role in the negotiations. But success would have been impossible without the developing countries' resolve to act in concert under the aegis of G-20. In fact, the negotiating clout that this group acquired at Cancun has got consolidated at Geneva. This should stand the group in good stead when the real bargaining begins, for signing by December 2005. That deadline could be missed for two reasons.

First, nothing significant is likely to happen between now and the US presidential elections. Second, having agreed to the broad framework, the rich countries are bound to try every trick in the book to limit concessions to the poor and draw maximum benefit for themselves when the details are worked out prior to the ultimate accord. Thus, what has been achieved at Geneva is not an end but only a beginning and the road ahead is far from hurdle-free.