The World Trade Organisation, or WTO, wrapped up its ministerial meeting without deciding how to revive global trade talks, focusing instead on welcoming Russia to the fold and securing a government-procurement accord. But the talks started on a sour note when China slapped punitive duties on large cars and SUVs imported from the US, the latest in a tit-for-tat trade spat.
This year marks the tenth anniversary of the Doha round of global trade talks that started in Qatar in 2001. Since then, the talks have missed several deadlines. Efforts to reach an agreement during the Doha Round of trade talks have been blocked for years as the countries fail to make concessions on lowering agriculture subsidies and industrial tariffs. Ministers including US Trade Representative Ron Kirk have said the round needs a new approach after a decade of unsuccessful attempts to bridge gaps among 153 nations.
The highlights of the three-day ministerial meeting in Geneva on December 15-17 were the accessions of Russia, Samoa and Montenegro, and a 42-nation agreement that opens up government-procurement contracts — valued at as much as $100 billion — to more foreign competition.
“We have set a good example in these three days,” said Nigerian Trade and Investment Minister Olusegun Aganga, chairman of the ministerial conference. “We have sent a strong collective message that the WTO is more than ever important to the world. We have seen constructive dialogue among ministers, which has improved the WTO’s atmosphere.”
Efforts to reach a global trade deal won’t progress until the negotiations address changes that have occurred since the round began, Kirk said. Exceptional growth, especially by China, “presents us with one of the biggest challenges confronting our work on trade and development,” he said. “A one-size-fits-all approach does not accurately reflect the realities of the world we live in,” Kirk told ministers. “Developing countries are not the same, and pretending that they contribute to the deadlock in our discussion on many of these important issues [may be unproductive].”
While a “meeting of minds” is important to advance the Doha Round, it’s not enough, said WTO Director-General Pascal Lamy: “We need a joining of hands so we can undertake the hard work required on a number of issues”. The conference underscored the fact that the WTO must move the negotiating agenda forward to remain relevant and that such a move will be gradual, Lamy added. “We leave this ministerial, which was not a high-ambition ministerial, with a better sense of priorities for the next years,” he said.
“While the Doha Round is indeed stuck, it is important to recognise that the WTO is about more than Doha,” said Christopher Wenk, senior director for international policy at the US Chamber of Commerce. “All of the bad press over the years about the lack of progress on Doha has left a stain on the WTO, and that is a shame.”
Ministers also discussed the need to keep markets open and resist protectionism, “particularly in this challenging economic environment,” Aganga said. Some ministers pressed for the removal of all recent protectionist measures and a halt to any new ones, he said. They highlighted the importance of keeping markets open and the need to resist protectionism, particularly in today’s challenging global economic environment. Many ministers sought a stronger message against protectionism, stating that the prevailing economic climate had made it all the more essential, according to a statement issued by the WTO after closing the round that saw 153 member-countries coming together to hammer out a deal.
A number of ministers expressed concern over the increase of protectionism in agricultural trade in the form of trade-restrictive measures — without scientific or technical justification. Some ministers also aired worries about an increasing resort to private standards and food-labelling requirements.
Cotton, within the context of the Doha talks and global trade security, was also discussed by the Cotton-4 (C-4) countries — Benin, Burkina Faso, Chad and Mali — on the sidelines of the conference. Kirk and a European Union delegation led by Agriculture Commissioner Dacian Ciolos met separately with officials from Africa’s four main cotton-producing nations, which together account for about 15 per cent of global exports. These countries had been greatly impacted by the subsidies doled out to cotton farmers in the US and the EU.
The failure of ministerial talks hinges on the fact that rich countries cared only about their own interests and had little, if any, concern for those of poor nations. For example, when it came to the question of agriculture, the former were not prepared to compromise on the issue of subsidies. When the Doha Round negotiations collapsed in October 2008 at the WTO headquarters in Geneva, the reason was that the US and the EU were unwilling to scrap huge subsidies they give to their farmers.
Moreover, the developed countries were implacably opposed to a proposal to help poor farmers in developing countries to counter the effects of floods of subsidised imports which undermine their agricultural production and worsen their livelihoods. It is encouraging, however, to note that developing nations are not ready to accept any pact that perpetuates unfair trade practices and does not address their development priorities: jobs, food (and land) security, a secure environment and rapid rural progress. This stance must be maintained to the end — because “no deal” is better than a “bad deal”.
As for the Indian government, it has highlighted the need to keep the negotiating process transparent and inclusive. Minister of Commerce and Industry and Textiles Anand Sharma articulated India’s strong commitment to the issues affecting the least developed countries (LDCs), as well as to the small and vulnerable economies that have hitherto remained marginalised from the global trading regime.
According to experts, the cost of this failure of the WTO is likely to be considerable. The next window of opening for a Doha deal would be available only after a new administration assumes office in the US in 2013.
The writer is author of World Trade Organisation: Its Implications on Indian Economy
