The Hindu Business Line : Doha Round negotiations — Are the revival signs for real?

Despite the vastly improved economic prospects in recent months, the business-as-usual model of negotiations is unlikely to deliver results. Developing countries will need to assume leadership positions in consonance with their economic clout.

Suparna Karmakar

Talks related to the Doha Round have resumed in Geneva following the informal mini-ministerial meeting at New Delhi earlier this month, where Ministers from over 35 countries, representing a broad spectrum of the WTO membership, promised to conclude the Round by 2010.

This latest pledge is one more in the series of many such statements of good intent over the past few years, but it could be argued that with the revival of the world economy in recent months, key WTO members may find it easier to summon the political will and make the commitments and sacrifices necessary to conclude the Round.

The Delhi meeting formally broke the year-long hiatus in WTO negotiations by emphasising that global trade negotiations should not only resume but remain multilateral.

This was reiterated in the recent Senior Officials’ meet in Geneva, where key LDC members said that while bilateral or smaller group meetings are necessary, the negotiations should involve the full membership in Geneva.

Developments since July 2008

In the past year, Doha negotiations remained low-key discussions focussed on technical and housekeeping issues, while the attention of the world economic leadership was trained on reviving the faltering global economy. Given the scale of the economic crisis, it is not surprising that, until last month, furthering trade talks was not very high on policy-makers to-do list.

But after the Delhi meeting, activity at the WTO Secretariat has been re-energised.

In order to step up the pace of negotiations, senior officials met in Geneva from September 14 to draw up a process of engagement for the next 2-3 months and prepare an overall agenda of engagement.

Activities connected with the two most contentious pillars of the Doha Round — Agriculture and NAMA negotiations — were stepped up, and Members are working to fill the gaps remaining from last July.

The Agriculture Chairperson has started working with Members to develop a work programme that will spell out the commitments that members will make, in addition to tackling outstanding topics in the December 2008 draft.

The NAMA Chairperson, in an informal meeting, urged Members participating in the industrial goods negotiations to focus on non-tariff barriers and to exchange information on sectoral negotiations aimed at achieving greater tariff reductions for specific industrial products.

Push to conclude DDR

All the above appear to be a replay of negotiations in 2007 and 2008, with loads of statement of intent and little actual movement.

However, the experience of the past 12 months indicates that reinforcing the multilateral trading system through the conclusion of the Doha Round is critical, even in the context of the economic crisis. The protectionist sentiments that resurfaced with the onset of the current crisis may not compare with the trade wars experienced during the Great Depression, but several studies have established that sectors subject to greater multilateral rules have remained less impacted by the protectionist moves of nation-states.

WTO rules, improvement of transparency mechanisms and regular monitoring of trade and trade-related measures by the WTO secretariat did prove useful in containing protectionism in this most recent crisis, by limiting national protectionist actions to largely WTO-compliant measures.

It is, therefore, argued that additional multilateral rules and regulations that the Doha Round will impose on members will have a dampening effect on future protectionist moves, and is reason enough for the affected WTO Members to make a more concerted move to conclude the ongoing Round. Furthermore, an independent team of trade policy analysts at the Global Trade Alert (GTA) investigated over 425 state initiatives.

They find that in each quarter of 2009, governments implemented approximately 70 initiatives that containing measures that almost certainly discriminate against foreign commercial interests.

Though there are over 40 cases where the implementation of state measures either liberalised international commerce or improved transparency of a trade regime, the overwhelming picture is that state initiatives reduce foreign commercial opportunities and reverse the 25-year trend towards open borders.

In particular, the GTA team estimates that, worldwide, the number of discriminatory measures being implemented outnumbers the liberalising measures by five to one.

For example in the case of India, the GTA analysis indicates that out of the 86 state measures (the non anti-dumping, anti-subsidy and safeguard actions) affecting India’s commercial interests, about 79 per cent are measures (implemented by 44 trade partners) that may harm or almost certainly discriminate against India’s interests.

Leadership positions

But will all this result in credible offers by the members? It is acknowledged that the political signals emanating from the previous meetings did not translate into action in Geneva. Despite the vastly improved economic prospects in recent months, the business-as-usual model of negotiations is unlikely to deliver results.

Developing countries will need to assume leadership positions in consonance with their economic clout. This calls for China’s greater voice in the ongoing global trade talks.

An important development in the past year has been the gradual emergence of China in the global trade talks, which is notable given the latter’s demonstrated stance of maintaining a low profile despite its growing economic prowess.

The US’ recent decision to impose a 35 per cent tariff on imported Chinese tyres will hopefully motivate China to do more than the retaliatory move of initiating anti-dumping investigations into American chicken and car-parts exports.

(The author is a Visiting Research Fellow with the Institute of South Asian Studies, National University of Singapore. blfeedback@thehindu.co.in)

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