The more things change, the more they remain the same. This is what Jean-Baptiste Alphonse Karr, a French critic, journalist and novelist, said almost 200 years ago. This witty statement captures exactly where the Doha Round stands after seven years of ups and downs. Last week’s failure in Geneva is another grim reminder of how little things are changing despite innumerable claims of progress. The mini-ministerial meeting was called to finalise the modalities that would suggest the level of tariff and subsidy reduction commitments for farm products and cut in import duties of industrial products for the World Trade Organization members.
But it broke down on an issue concerning the trigger to use appropriate remedies in a Special Safeguard Mechanism (SSM) for developing countries. This is an instrument that developing countries sought most to curb sustained surges of farm imports that could cause massive damage to their domestic producers. At the core of the breakdown is a dispute between two major developing countries — India and China who were backed by nearly 100 countries — and the US and its farm exporting allies. The majority wanted some easier rules to apply the SSM in the event of import surges akin to an existing mechanism for the industrialised in the form of the Special Safeguards. But the handful of farm exporters led by the controversial global farm subsidiser — the US — was willing to grant such a mechanism only with some tight conditions like when the trigger was to be applied and how much should be the remedy for products undergoing a zero cut in the Doha Round.
The US Trade Representative Ambassador Susan Schwab repeatedly chanted the mantra that without those norms the proposed SSM would be “abused and set back the trading system for decades to come” — a 140 per cent SSM trigger means that if import volumes rise by more than 40 per cent over the average of the last three years, countries can increase import duties by 15 per cent. The majority of the developing countries led by India and China said they would not accept a SSM which, in reality, would be difficult to operate and impotent to contain the damage.
Beside this issue, WTO’s head, Pascal Lamy, claimed huge progress during the collapsed nine-day ministerial meeting. Never in the history of global trade negotiations were ministers from over 30 countries forced to stay to for so long. Credit goes to his tenacity and sheer determination to hold them together for so long even though a large majority of them were not engaged. Despite the failure, Lamy must be satisfied that his earlier prognosis of over 50 per cent chances of success have turned out to be 90 per cent at the end of the ninth day. Notwithstanding the collapse and gloomy political clouds hanging over major countries, he is now bent on having another go at it some time in September.
Surely, if there is such a high percentage of progress it should not be difficult to wrap it up in the coming days? But the moot issue is if there is such a turnaround so that the Round can be concluded by the end of this year. A thorough examination of events in Geneva last week does not lend credence to such an optimistic picture. If anything, the latest show on the banks of Lake Leman where the WTO is housed seems like a combination of Seattle and Cancun ministerial meetings in repeating the same old mistakes all over again.
Like the infamous Seattle ministerial meeting in 1999, the Geneva event too was shrouded in controversy over the lack of transparency during the actual proceedings. There were cries of “darkness” at noon by many participants who pointed an accusing finger at the actual process which was limited only to seven countries. Barring the US, the EU, Japan, Brazil, India, Australia and China, other members had to wait on the sidelines to know what was cooking between these countries and the director general.
Worse still, the Geneva meet repeated the Cancun fiasco of 2003 in two fundamental ways. At Cancun, agriculture was not discussed because of the embarrassment it would have caused to the US at that point. And in Geneva, cotton — which has become a deathly issue for over 10 million poor farmers in Benin, Burkina Faso, Mali and Chadm — was not touched because the US had not yet made up its mind. The US is the chief global trade-distorting-subsidiser of cotton wreaking havoc on the lives of the poor Africans.
Further, the Geneva meeting repeated the same old mistake of altering consensual drafts to suit some powerful countries. For example, a draft circulated by the director general at the end of a roundtable and confessionals with the trade ministers from seven countries on the night of July 24 suggested a ‘trigger” for SSM at “120 per cent+ of imports” for developing countries. Come July 25, the figure was changed to 140 per cent to help the US to join the consensus. How on earth was it changed and who is responsible? Ultimately, this scandalous development led to the collapse of the grand Geneva Trade Show!
