The Hindu Business Line : No development in Doha Round

The outlook for a successful conclusion to the Doha Round of multilateral trade negotiations is becoming bleaker with the passage of time. That the talks held among the principal players in the negotiations in New Delhi recently failed came as no big surprise. But instructive was the fact that there has been more or less no change in the blame-game since the middle of last year when the World Trade Organisation chief, Mr Pascal Lamy, suspended the talks because of the dead-end they had reached.

Reports on the two days of parleys among the G-4 countries — the US, the EU, Brazil and India — expanded later to include Japan and Australia, indicated that Washington continues to remain the `bad boy' of the WTO. Washington has been portrayed as being adamant in sticking to its previous stand on reduction of support for farmers: While its WTO partners would like it to reduce farm subsidy to below the existing $19 billion level, the US has said it would prefer the subsidy level to be around $22 billion. On its part, the US has maintained that there can no meaningful progress in the talks unless Europe cuts farm tariffs by around 64 per cent against a 51 per cent reduction-offer made by Brussels. Of interest is the fact that both Washington and Brussels have demanded in equal measure that developing countries lower even further their import tariffs on manufactured products if they want the West to dilute its farm-protection measures. The developing countries have consistently argued that this being a "development round," the industrialised economies will have to concede relatively more ground vis-à-vis their present trading positions if the Doha Agenda is to be fulfilled in letter and spirit. While Brussels and Washington have endorsed this general line, they have done precious little that would faithfully reflect their political commitment, which is hardly surprising.

The future of the Doha Round is also clouded by the changing political scenarios in both the US and the EU. While the former is gearing itself up for the Presidential election next year (which means that powerful domestic lobbies cannot be disturbed), the EU is in for a change in its stewardship (not to speak of leadership changes in some important member-countries) that does not augur well for further concessions in agriculture. Since farm issues continue to remain the key of the Doha Round negotiations, it is perhaps safe to suggest that no meaningful progress can be expected in the near future. This would not only be disastrous for the further liberalisation of multilateral trade but also affect the growth prospects of the developing world.