Events & Issues

New Delhi, 23 June 2009

Doha Trade Talks

DELHI GIVES PUSH FOR RESTART

By Dr PK Vasudeva

Reflecting desire of several key WTO members, including India and the US, to return to full-scale negotiations to conclude the Doha global trade deal, talks on bridging gaps on agriculture, non agricultural market access (NAMA) and services are likely to pick up momentum again.

The World Trade Organisation (WTO) said in a statement that “Chairperson (of agriculture negotiating group) David Walker (has) announced that the agriculture negotiations will return to a “multilateral” process (i.e. one involving and controlled by all members), reflecting members’ desire to see the talks pick up momentum.” Accordingly, a schedule for negotiations for the next few weeks, before the summer break in August and early September has been announced.

In a surprise move, Commerce and Industry Minister Anand Sharma had said in the US that New Delhi is ready for “give and take” without being “frozen in pre-negotiating position” in the interest of global trade. After fruitful discussions in Washington, he said the “interlocutors have been told to take steps for resuming the multilateral negotiations,” the Doha process. “If there is a log-jam it has to be broken and the process taken forward. We have to come together, sit together to find a common meeting ground,” he has made it known. 

Describing the Doha Round as a marathon that is on its “last lap”, Sharma has hoped that countries would show flexibility for concluding the negotiations. Undoubtedly, concluding the Round at a time when countries are battling an economic slowdown will send a strong signal of willingness by nations to move away from protectionism to a rule-based multilateral global trading system.

Placed in the opposite camps of the developing and developed countries, India and the US had serious differences over the level of protection that should be provided to subsistent farmers from opening of global agri markets.

The Doha multilateral negotiations launched in 2001 have remained inconclusive since July 2008, depriving the world of an additional trade opportunity, estimated at $150 billion. If taken forward, it could provide a boost to the world economy reeling under the slowdown. New Delhi hopes there would be a ‘road map’ to restart the Doha Round of global trade talks by the time the G-8 Summit meets in Italy this year. “Let us make efforts to resume the stalled Doha Round talks,” Sharma said while inaugurating a CII-India Conference on “Managing Global Crisis”.

However, to succeed, negotiators have to ensure that this remains a Development Round both in letter and spirit. Any digression from the core principle of the DDA would dent the image of the WTO in the developing world as a platform for negotiating fair multilateral trade rules. The current economic slump and protectionist reactions from the industrialised world earlier this year should guide negotiators towards commitments that will stand the test of time for all countries.

Indeed, India would be under pressure from developed countries to hasten the process of liberalisation since it has witnessed growth even during the current slowdown. Therefore, from an industry perspective, it is imperative for New Delhi to bind itself to commitments that would continue to keep its products and services competitive in global markets, which can turn protective under pressure.

Clearly, some important objectives have to be met for the Round to be successful. First, there is need to ensure that market access to countries in the three main areas--industrial goods, services and agriculture retains a balance.

Second, in the area of industrial goods, negotiators should focus on lowering the rates of tariffs based on an agreed formula and there should be no move towards a zero duty regime for select products, as proposed by some developed countries. The Swiss Formula as advocated cannot be accepted by the developing nations as it amounts to being discriminatory. Given the structure of industry in the country, it will be impossible to safeguard interests of small industries in any sector if tariffs are eliminated at a multilateral basis. Clearly, any such move for India, which has an industrial base comprising several layers of SMEs, should be on a bilateral basis, not at a multilateral level comprising 153 member countries.

Third, there has to be enough meat for negotiations on the services pillar. There is very little to show on what India will gain in the services sector from the Doha Round. To ensure balance, it is important to build a strong services agenda before concluding negotiations on industrial goods or agriculture. 

To remain competitive, there is also a need for industry to understand the impact of commitments that New Delhi may make under the single undertaking in areas such as WTO Rules; Anti-Dumping and Subsidies; Trade and Environment; TRIPS, Biological Diversity and Traditional Knowledge; before the Round is concluded.

Herein lies the problem: It is the differing perceptions of the developing and the developed countries on the outcomes of the negotiations on most of the critical areas included in its negotiating mandate that have resulted in the impasse in the Doha Round. While developing countries have argued for the mainstreaming of development objectives in the multilateral trading system, the developed countries have pushed for market access in areas that suited their interests.

This hiatus between the two groups of countries was clearly evident in agriculture and services. Thus, in agriculture, developing countries have argued that the WTO Agreement on Agriculture must take into consideration the interests of the low income and resource-poor producers by providing them higher level of protection, while developed countries have sought larger market access to promote the interests of the large conglomerates, in particular.

But in services, where several developing countries have argued for higher degree of market opening, especially under Mode 4, which allows job-seekers better access to international markets, developed countries’ response has been rather lukewarm.

As countries are getting into the negotiating groove once again, a balanced outcome is expected from the Doha Round. The architects of the Round had, in fact, tried to ensure such an outcome when they had agreed that the outcome would be in the nature of a ‘single undertaking’, which really meant that the Doha Deal can only be done when WTO Members have concluded agreements on all areas included in the negotiating mandate. 

Thus, the negotiations have seen considerable movement in the areas of agriculture and market access of non-agricultural products, while the area of services has been on the back burner. Dealing with agriculture and NAMA in the negotiations without bringing in services and several other areas of interest to developing countries, including the possible discipline to prevent misappropriation of traditional knowledge and illegal bio-prospecting, would leave these countries at a tremendous disadvantage.

Among other issues, they would have to fast track the services negotiations, which may be the only way to counter the restrictions on Mode 4 services that have been imposed by several developed countries during the past few months.

Clearly, Sharma has to keep it in mind while negotiating that there is a lot for all countries to gain from the Doha Round, yet the core objectives set at Doha in November 2001 have to be safeguarded. It is not so easy to settle the issues related to agriculture, NAMA, services and Trips because the developed countries have to give much more to bring in the balance in the multilateral trade. --INFA

 (Copyright, India News and Feature Alliance)