The first multilateral trade negotiations — the Doha Development Round — being undertaken under the umbrella of the World Trade Organisation (WTO) , risk a collapse if the running options such as ‘business as usual,' ‘stopping and starting from scratch' and ‘drifting away' are not surmounted.
This is the broad message the Director-General of the World Trade Organisation (WTO) delivered in Geneva at the informal meeting of the Trade Negotiations Committee that oversees the negotiations in all topics. But the WTO Chief, as the Chairman of the TNC in his opening remarks, rightly reminded the trade envoys that “the round was launched because a broad spectrum of members converged on its potential as an instrument for growth and development and I see it our duty to keep faith with their vision.”
Interestingly, a number of WTO ambassadors, the trade representatives of member nations as they are known in the WTO parlance, echoed Mr Lamy's lament about the perils ahead as the membership confronts the real prospect of Doha Round failing, with the political ‘window of opportunity' that is seen to exist in 2011 rapidly fading. They also rued the costs of such a mishap as the lost opportunity of boosting trade and development, increased protectionism and the erosion of faith in the trading system.
Mr Lamy was not off the mark when he rightly reminded the members that “failure of the WTO to deliver on its legislative function, failure of the WTO to update the rules governing international trade — last updated in 1995 — by adapting them to the evolving needs of its members, failure of the WTO to harness our growing economic interdependence in a cooperative manner, risks a slow, silent weakening of the multilateral trading system in the longer term.”
TNC meet
In the day-long TNC meeting on April 29 in Geneva, several ambassadors spoke of the need for straight talking, in private if need be, in the quest for a breakthrough, while others called for the process to continue to be transparent (information shared) and bottom-up (ideas emanating from the members) praising the April 21 texts on all topics currently under negotiations for following these principles. Some also adverted to a letter their ministers wrote to the TNC on their resolve not to let the Doha Round flounder further and fail.
Even as Mr Lamy graphically put it that “a classic mercantilist issue, tariffs on industrial goods or non-agricultural market access (NAMA) products, the bread and butter of WTO negotiations since their inception” is blocking closure on the remaining open issues, the European Union (EU) reported a compromise it has been discussing with some countries.
This is a proposed deal for free or almost-free trade among countries representing a large share of world trade, in specific sectors in the NAMA talks, whose span includes forestry and fishery products as well as industrial goods. The EU specifically referred chemicals, machinery and electronics. But some other ambassadors complained that the focus on NAMA sectorals is driven by the export interests of some developed countries, deflecting attention away from the development remit of the Doha Round.
Cotton subsidies
True to the Doha mandate of promoting trade and development issues dear to the majority of the countries, including the developing, poor and the least developed countries (LDCs), these countries voiced concern, stating in particular that the deadlock prevents them from “enjoying the gains that are already promised such as duty-free, quota-free market access for LDCs in richer markets and cuts in cotton subsidies in rich countries.”
At the end of the day, Mr Lamy told the WTO members that he proposed a process of consultation with all the stakeholders about the way ahead and revert to the TNC on May 31. Trade policy analysts here said that the post-war world trade regime that served the global economy through thick and thin in its earlier avatar as the GATT and now as the WTO should not be allowed to fail.