The Hindu Business Line : WTO talks: Working holiday

With positions on agriculture and NAMA all but etched in stone, it would be surprising if any real progress is made during the August holidays towards a settlement of the differences over the Doha Round.

Ranabir Ray Choudhury

The August holidays have once again overtaken the unending negotiations in Geneva on the Doha Round and it is now being expected, almost routinely one suspects, that when September arrives there will be some movement forward in the talks. But, of course, to those who have been plotting the course of the negotiations, this hope cannot be a sincere one as the early noises that have been made on the negotiating drafts presented to the World Trade Organisation member-countries by the chairmen of the Agriculture Negotiating Committee and that on Non-Agriculture Market Access (NAMA) have not been encouraging.

This is not to suggest that the WTO Director-General, Mr Pascal Lamy, has been insincere in holding out the hope that there may be some progress in September when work on the Doha Round begins anew. Far from it. Everyone agrees that Mr Lamy finds himself in a difficult spot vis-À-vis the nuts and bolts of the negotiations. And yet, being head of the organisation, it is his bounden duty to goad the members on along the path of compromise and settlement so that, at the end of th e tortuous road, there will be success in Geneva.

Aiming for Compromise

This is why, more than just relying on hope for a successful conclusion of the negotiations, Mr Lamy has been focussing on compromise because he understands (having being the EU Trade Commissioner before he took up the job in Geneva) that without member-states being willing to give up some ground in their negotiating positions, there is simply no hope for the Doha Round seeing the light of day in the near future.

Thus, only last week, he told the WTO General Council as chairman of the Trade Negotiations Committee, that there continued “to be a high level of commitment to concluding the Round” and that there was now in sight “a very significant package of trade opening and rule-making, and a strong collective commitment to work for a more development-friendly world trading system.” He added that the distance left to traverse was ‘not so great’ and that it would require “a good dose of extra effort by all participants,” but that “it can be done.”

However, he also said that convergence was within reach “if you are all ready to show the necessary will and flexibility to close the gaps.” Indeed, this is the crux, the problem being made even more difficult by the fact that some very large member-countries (such as India and the US) have alert and active domestic lobbies to contend with, and especially at a time when elections are not very far away.

No Shortcuts

Mr Lamy’s ‘extra effort’ meant “being open to compromises, while still respecting the mandate and aims of the Round.” As he said, “It means intensive work, knowing that there are no shortcuts. And it means negotiating with each other instead of trying to negotiate with the Chairs.”

The WTO chief is clearly pinning a lot of hope on the drafts produced by the agriculture and NAMA negotiating group chairmen, his view being that the members should take it up from there and move forward.

The roadmap is, therefore, clear, but the important question is whether the two drafts have really thrown up any possibilities of progress ahead. If the reported unofficial responses of members are any indication, the prospects are not bright.

At least according to one report, when the Agriculture Committee chairman, Mr Crawford Falconer of New Zealand, said that the delegations would have to “yield on longstanding demands if the talks were to move forward,” the general reactions ‘were largely predictable’. The Union Commerce Minister, Mr Kamal Nath, has said that the text is a “good basis for starting intensive negotiations,’ even though it was “not a text of convergence”.

In agriculture, no fresh ideas have been thrown up that can open up new vistas which could be explored fruitfully by the rich and the poor alike. Thus, as far as trade-distorting domestic farm support is concerned, the chairman has once again juggled with quantitative categories which, frankly speaking, is a route which has already been tried out and has reached a dead-end.

Among other things, the draft has called for a level of US overall trade-distorting farm support which is lower than even the $17 billion broached unofficially by Washington (the level offered formally being $22.5 billion) leading the US delegation to dismiss the suggestion as being ‘out of the question’. And of course, the developing countries are in no mood to accept the US offer. As Mr Kamal Nath, reacting to the US stand, said: “A development round doesn’t mean you reserve the right to keep your subsidies and increase your distortion.”

Unacceptable to both

From initial reports, it appears that the response to the NAMA draft presented by the NAMA Negotiating Group chairman, Mr Don Stephenson of Canada, is likely to be hostile with both the rich and the poor unofficially describing it as unacceptable.

According to one report, the tariff reductions suggested by the chairman would “cap industrialised country manufacturing tariffs at 8 or 9 per cent, with across-the-board reductions to all duties, while placing the ceiling for developing countries at between 19 and 23 per cent.”

While countries such as South Africa, Brazil and India have reportedly found this proposal “disproportionate both in terms of what is on offer in the agriculture negotiations, as well as in its requirement for developing countries to cut their bound tariffs more steeply than developed ones,” the US and the EU have reportedly said that the text “does not go far enough in seeking tariff reduction by developing countries.”

In view of all this, it would be surprising if any real progress is made during the August holidays towards a settlement of the differences over the Doha Round. In agriculture and NAMA, the positions already adopted are probably etched in stone. But there are other areas of the negotiations where progress can be achieved. The problem is that such discrete progress to the exclusion of a settlement in agriculture and NAMA will be of no use because of the ‘single undertaking’ stipulation, which Mr Lamy once again emphasised on last week.

Perhaps a re-think on the ‘single-undertaking’ requirement would be timely now, especially when, in the event of a failure on the Doha Round, nothing less than the future of the WTO would be at stake.