Forward movement

The mini ministerial meeting on the Doha round of World Trade Organisation (WTO) talks on the sidelines of the annual meeting of the World Economic Forum at Davos was not expected to take any concrete decisions. But it has not been wholly inconsequential. For, it has managed to crack some tactical issues that are capable of moving the deadlocked negotiations forward. Over 20 trade ministers, representing almost all the major groupings, have agreed upon a time-frame for submitting their firm proposals on all the four contentious subjects""agriculture, trade facilitation, non-agricultural market access (NAMA), and services. What is significant here is that they have expressed willingness to improve their offers and to table them simultaneously to help break the standoff that had crippled the parleys till now. This marks a distinct break from the past when no one was ready to move until others put up better offers.

Notably, the Davos meeting also sent out some other signals of change in the attitude of negotiators. For one, it was the US""and not the EU as in the past""which was urging others to improve their offers on agriculture, including subsidy cuts and market access, so that a settlement could be reached within the tight time-frame. This, in a way, seems understandable, considering the mid-2007 expiry of US President George W Bush's trade promotion authority (TPA). After that, the US administration will be unable to present any Doha round deal to Congress for a simple "yes" or "no" vote. The other significant development pertains to the realisation among the developed countries that though agriculture constitutes merely 3 per cent of the global trade, it is crucial for the livelihood of millions of people in the developing countries. As such, they seem to be more inclined now than ever before to review their market-distorting subsidies so that such a tiny issue does not stall the larger process of international trade liberalisation. Moreover, there were also some indications, however muted, that the developing countries, including India, were willing to concede some ground on NAMA and services. But these countries are firm that non-tariff trade barriers that are often used by the developed countries to limit access to their markets and services must go. This is crucial for India because it is getting ready to graduate from low-cost business process outsourcing to knowledge and technology process outsourcing.

However, what needs to be realised is that these intentions have to be translated into commitments for firm action for the Doha round to come to a successful conclusion. For this, the ball continues to be in the court of the US and the EU. They have to take decisive strides on subsidies and tariff cuts, besides other issues. Where agriculture is concerned, as many as 33 issues have been identified which need to be sorted out. There is a demand for the US to deepen the 53 per cent cut it is willing to make in the overall trade-distorting support. There is also a feeling that the EU's offer of an average farm tariff cut of 46 per cent is too low and, therefore, needs to be suitably raised. Under the circumstances, the actual proposal documents submitted to the WTO in the agreed time schedule would only provide a cue to the progress in the talks.