Doha: No talks

Missing deadlines seems to have become routine in global trade liberalisation. With the World Trade Organisation's (WTO) director-general, Pascal Lamy, cancelling the mini-ministerial meeting scheduled to be held in Geneva this week, the Doha Round of trade talks has formally missed the April 30 target for putting together a framework for final agreement on the Round's agenda. Though Mr Lamy has put a brave face on this development by declaring that missing the deadline does not mean a deadlock in the negotiations, his statement does not carry conviction. All the crucial issues""including subsidy cuts, tariff reductions, market access for non-agricultural products, and services""are still wide open. Even as the US and the European Union blame each other for not conceding much ground on these subjects, what both of them are prepared to hold out for the developing countries is too little to facilitate an accord.

Their proposal for eliminating export subsidies by 2013 provides cold comfort to others, as these sops constitute only a minor fraction of the total trade-distorting agricultural support. In the EU, these sops constitute a mere 3.6 per cent of total farm spending. Besides, their offer for duty- and quota-free market access for the poorest countries is subject to several restrictions, most of them uncalled for. And the proposition of aid-for-trade is nothing but a recycled package of old pledges. Moreover, the EU is unable to go beyond what it has already mooted in terms of cutting its agricultural spending because of the stiff resistance from its key agricultural member-country, France. The US, on the other had, did offer in October last year to cut the current WTO cap on its trade-distorting subsidies by 60 per cent, but that was in exchange for big cuts in tariffs on agricultural and manufactured goods and, as such, these did not evoke a positive response from others. In any case, the US has till date not slashed any subsidy at all.

The US and the EU are also not willing to settle for less-than-equal reciprocity for the developing countries as an underlying principle for tariff reduction. On the contrary, both have begun insisting that advanced developing countries like India and Brazil should sharply lower their barriers to imports. Notably, related to the subsidies and market access issues is the vexed question of non-tariff trade barriers that the developed countries often put in place so as to deny entry to products of poor nations. Unfortunately, this aspect has not got the attention it merits.

In view of all this, it seems fairly obvious now that it will be difficult for the negotiators to hammer out a final package prior to the July 2007 expiry of the US presidential powers to negotiate a fast-track trade deal. But that cannot and should not be the reason for the developing countries to agree to a bad deal, hurriedly crafted""especially when this was supposed to be a "development" Round. The short point is that each important country thinks it needs to get more than it gives, in the trade talks. If that becomes the new standard for international negotiations, don't expect today's deadlock to end any time soon. The prospects for the Doha Round have got significantly dimmer this week.