India hosts next week an “informal ministerial” meeting of key members of the World Trade Organisation, to try and give fresh momentum to the stalled Doha Round of trade talks. There has been little progress over the past year, but a combination of forces may now make it possible for progress on some key issues. All the key groups of countries that represent different interests in the WTO will be present in New Delhi, and the meeting itself is structured such that participants have go to beyond prepared opening statements—which usually do not say anything more than being committed to the success of the Doha Round and what the national position is. In other words, participants will have to come prepared to indicate what and where they can give, and how much. The meeting will be a success if participants cover enough fresh ground for talks to be re-started formally at the WTO headquarters in Geneva. But trade negotiations are so tortuous that, even if things go well, there will be no new multilateral trade agreement before the end of 2010.
India, seen by many countries last year as one of the villains of the piece, has under a new commerce minister focused in the last three months on re-building trust with some of the major trading nations, in particular the United States. Some statements that were made during that process went a little overboard, however, and in recent weeks the country’s negotiating positions have been re-centred so that everyone knows where India stands. India’s credibility in trade negotiation circles has also been strengthened by the speed with which it has successfully concluded and signed bilateral trade agreements with both South Korea and the Association of South-East Asian Nations (Asean), in the last few weeks. However, negotiations mean give and take, and the country has to be clear on what its negotiating chips are. One pressure-point applied on India is to close the gap between its fairly high “bound” rates, committed to WTO in previous trade negotiations, and the actual tariff rates that exist. The leading industrial lobby groups need to be intimately involved in the process of determining which sectors have the cushion to be able to offer some bargaining chips.
The European Union is generally understood to be keen on concluding the Doha Round, because its multi-year budgeting process has already laid down a time-line for amending the continent’s common agricultural programme, and reducing subsidies. Time, therefore, is not on Europe’s side if it wants to use its internally mandated subsidy cuts to extract matching concessions from the other major trade groups. The United States, under a Democrat president but with a less aggressive trade representative, will have to cover a lot of ground if it does not want to end up being the fall guy in a failed Round, and it remains to be seen whether the required concessions will be forthcoming. In the interim, the kind of kite-flying done recently by the Australian trade minister suggests that aggressive tactics cannot be ruled out.
