Events & Issues

New Delhi, 1 April 2008

Doha Round Talks

UNREALISTIC & LITTLE HOPE  

Dr. P. K. VASUDEVA

It has been reported by the commerce and industry ministry that India is preparing for a WTO ministerial meeting in Geneva in May 2008. This has raised the hope that there could be a successful resolution of the ongoing Doha Round negotiations. The reason being attributed for this meeting is that the US would like to settle the Doha agenda before the US Presidential elections. While this is certainly in the interest of all the WTO members, India should not show undue haste to cobble together an accord just for the sake of accommodating the US election schedule.

The country has seriously taken the WTO Director-General, Mr. Pascal Lamy’s suggestion that since there is no point in continuing with the negotiations as one gets closer to the US polls, these would need to be suspended around mid-year. According to him, a Ministerial meeting held before the suspension would not only imply political acceptance by the WTO member-States of the progress made before the talks are suspended, but would also make it difficult for the next US Administration to ignore what has been achieved at the negotiating table.

Lamy’s point of view seems to have some weightage, but the more important point is to truly agree on a body of accords that could then be formalised by the proposed Ministerial meeting. So far the prospects of a meeting point between the developed and the developing countries seem bleak. In fact, just a couple of weeks ago, the Commerce Minister Kamal Nath made it clear that there were around 150 points of discord in the farm negotiations, which had to be reduced to not more than 50 before a ministerial could be held. The scale of the disagreement, as indicated by Nath is the result of intense bargaining spread over nearly six years, which makes the expectation of having two-thirds of the troublesome points being settled in the course of another five or six weeks unrealistic.

This is one of the dangers the Doha Round is facing today, one that could derail the WTO from the good work it is currently doing (mainly in the dispute-settlement sphere) and also ‘defang’ it vis-a-vis future trade liberalisation programmes. Nath has time and again emphasised that the content of any agreement is much more important than meeting schedules, a point reiterated by the EU Trade Commissioner as a principle earlier when he said viz the India-EU trade talks that both New Delhi and Brussels wanted to “deliver what is best for both of us and not the fastest”.

Much is being expected of the revised agriculture and non-agriculture market access (NAMA) drafts, which will be released shortly, as also of the services’ negotiations (of crucial importance to New Delhi), which have finally got under way. The ground realities, however, point to hurdles which will be difficult to cross in so short a time.

The point of concern is that the problems in the way of clinching an agreement on the Doha Round have been there right from day one. This was more than six years ago, when the talks began after the fourth WTO Ministerial conference held in Doha in November 2001, with two deadlines — the original January 1, 2005 and the unofficial target of end 2006 — passing without any substantive progress in overcoming the obstacles. Thus, it would be nothing short of a miracle if, in the course of the next three weeks, a worthwhile initiative suddenly materialises and produces results which have for long eluded the best international trade negotiators.

Admittedly, a hastily arranged patch-up is possible but, as New Delhi has warned, any “accord” must stand or fall on its contents and not on its scheduling. In fact, the strongest signal that the Doha Round talks were as good as dead was hoisted in June 2007, when the G-4 Potsdam negotiations (among the US, the EU, India and Brazil) collapsed, with the Commerce Minister stating unambiguously that the developed countries were looking “at promoting and protecting the prosperity of their farmers” while in India the effort was to protect “the livelihood of our farmers”.

The blame was put on Brazil and India for not being flexible. The point being conveniently overlooked that the rich economies were expected to sacrifice a proportionately larger part of their economic interest compared to the poor in terms of the Doha Development Agenda. The gulf between the two sides is still so wide that while, Kamal Nath focused on the problems in the farm sphere, the EU Trade Commissioner, Peter Mandelson, said he was more worried about the differences on issues pertaining to trade in industrial goods. The responses indicate that the revised agriculture and non-agricultural market access (NAMA) drafts, released in February 2008 by the chairmen of the respective WTO negotiating groups in Geneva, have made no effective progress.

Does this mean the end of the road for the WTO? Not quite. Because while the Doha Round has failed to make progress till now, trade liberalisation measures distilled from the earlier rounds remain in force — rules and guidelines that can still be used by aggrieved parties to seek redress from the WTO’s dispute resolution bodies. Instructively, the latest beneficiaries have been both the developed and developing worlds, the US, the EU and Canada winning their case against Chinese auto-part import tariffs, and India and Thailand having their stand on US import conditions for shrimp exports upheld.

The Commerce Ministry has done well to draw attention to the need to focus on the content of the Doha Round negotiations rather than on the schedule. Admittedly, there is nothing new in this because this has precisely been New Delhi’s stand over the past couple of years. Even so, the issue has gained in importance now because of the critical shortage of time available to the international community to get a WTO deal done. This is perhaps why the emphasis has now shifted to the so-called “horizontal” approach, in which participants in the negotiations are expected to include officials, envoys and even Ministers.

As Nath has put it, the urgency with which the negotiations need to be conducted has to be “calibrated against the backdrop of realism” and, what is even more important, it has to “match the aspirations of the developing world” and conform to the development-oriented spirit of the Doha Round. While the telescoping of the negotiations road-map is understandable, given the indispensability of getting a deal signed and delivered by the end of the year, the ground conditions in the different sectors are far from conducive.

Thus, if one takes the farm scenario, the specific issues which have to be settled are not only quite voluminous--the US Trade Representative, Ms Susan Schwab, has said that “a significant number of the 40-odd outstanding issues” in the farm talks need to be settled before Ministers can be asked to join the negotiations — the differences among the various parties involved on a number of intra-sectoral subjects remains as big as ever.

Further, while the talks on agriculture--which have not made any substantive progress --have hogged the limelight, the negotiations on market access for NAMA, as the Commerce Minister sees it, have been plagued by the fact that the last draft text represented the views of “only one set of advanced countries while almost completely cold-shouldering the views of over a 100 developing countries”.

In view of all this, it is apparent that the outlook for the Doha Round is bleak, and it remains to be seen whether the fresh agriculture and NAMA drafts, to be presented shortly by the chairmen of the two negotiating groups in Geneva, will help to alter its fortunes. The problem is that even if they manage to do so, there are a host of other areas such as services, rules, trade-related intellectual property rights, etc, which may play spoilsport. Not because of an intrinsic inability to resolve the differences, but because there is just not enough time to discuss in-depth the problem-issues, without which a truly useful Doha Round for the poor world would not be possible. ---INFA

 (Copyright, India News and Feature Alliance)