A cautious optimism was in the air, when the dormant Doha Development Round (DDR), was re-energised and sprang back to the Conference table of 35 trade ministers, who met at New Delhi in early September 09 after a long gap of 14 months to deliberate on "Re-energising Doha: A Commitment to Development". The last meet of trade ministers in July 2008 disappointed everybody when no substantive measures could be agreed to and both the developed and the developing countries parted ways, holding out to their own respective stands. Now, India has taken the lead and invited trade ministers for taking DDR forward. The discussion paper circulated by India on the occasion amply described its intention when it said, "It is now time to draw these separate threads together, weaving them into a response of solidarity to move the multilateral process forward. This is what the Delhi meeting attempts to achieve." Gerlad Keddy, Parliamentary Secretary to the Minister of International Trade, Canada, amplified by saying, "This is a critical crossroad at the WTO. This meeting may not discuss the fine details on how we move forward but certainly it captures the willingness on behalf of all the nations, particularly the G-20."
The much-awaited news of breakthrough, after two days of intense deliberations, came when Anand Sharma, Commerce Minister declared, "We have reached an agreement to intensify negotiations. There has been a breakthrough. The impasse in restoring the negotiations has been broken. The ministers have agreed to review the progress made by officials and to do all that is possible to adhere (to) the timeline of completing the Doha Round by 2010."
In a candid acknowledgement, the end-of-summit summary released by Sharma spoke of Minister acknowledged that the unambiguous political signals emanating from earlier meetings had not been translated into action in Geneva. They were conscious that mere re-affirmation of commitment was not enough unless this was converted into effective instructions to negotiators to re-engage, with a view to concluding the Round successfully within 2010. Pascal Lamy, Director General, WTO acknowledged later in a meeting organized by Confederation of Indian Industry To be very frank, we have not had an active week of negotiations since July 2008. What we got from these meetings is that it is the time to go for re-engagement. Prime Minister Manmohan Singh applauded the global trade ministers for the breakthrough, saying This will uplift the animal spirit of economic agents all over the world.
To my mind, the Delhi Summit has served the purpose it intended. It was decided that the trade ministers would meet at Geneva within a fortnight to discuss the points of contention as Pascal Lamy puts it.
But what is perhaps even more important is: what it will lead to?
Though the Delhi meet had a limited number of invitees, the delegates did represent the interests of around 100 WTO members, who frankly aired their views on restarting the Doha negotiations and were positive on their immediate resumption so as to make adherence to the deadline of 2010 possible. There is a whole gamut of questions that would need to be tackled. Even the dimensions of the problems have increased manifold and so have the number of members of WTO.
According to Pascal Lamy, There remain tough nuts to crack in these negotiations and we should not under-estimate this. The Doha Round talks are more complex than the previous Uruguay Round as topics have increased threefold while the number of members has increased five times.
Some of very important participants in Delhi Summit were interviewed and in the course of their interaction, each of them pointed out his perspective, which was not necessarily on the same page with those of others.
While acknowledging An extraordinary amount of good work has gone into this round to bring us to this point, Ron Kirk, US Trade Representative, representing his country at Delhi Summit explained the complex nature of problems that are inevitable in the success of Doha Round. He said Understanding the Doha Round is a horribly complex process where you are trying to harmonise interests of more than 140 countries, all with different interests. These countries have different political dynamics as well, but if we are committed to the goal, we should be open to exploring any avenues that will get us there. On the question of way out of this impasse, he said, We believe that it is imperative to look at other alternatives inclusive of continuing our multilateral engagements, specifically the sustained bilateral acts of negotiations that will bring clarity. We think it is necessary to so that all the parties can have a clear picture of what to gain from the Doha Round. I think that was amplified somewhat here today by reservations of some nations that been reluctant to talk.
Brazils External Affairs Minister, Celso Luiz Nunes Amorim said, We know all the issues that are there and there is a basic agreement on the issues. We may re-touch some issues here and there, but cannot open up issues completely. On the question of using bilateral engagements within the Doha Round for additional market access, he said, I have been in this endgame for a long time. We have been engaging in bilaterals all the time. I understand that in this process, we now need some extra bilaterals to explain to other people what our commitments mean and have an idea of how flexibilities will be used. This is normal, but cannot replace the multi-lateral process..If we want to change to a bilateral process, we can be sure that the result will be much worse from the point of view of developing countries.
On the possibility of Doha deal being finalized by 2010, Amorim said, We have missed so many realistic targets that I would not comment on this. However, what I can say is that it all depends upon a single thing it is a technicality, but complex. It depends upon all the players wishing to finalise. If they wish so, and they know how to go about it, then you can do it. It is not like last July when we did not know what the formula to apply to NAMA was. So the question now is, is this the package or do we want to change the package. If the answer to the first question is yes, we can do it realistically. If the answer is no, then it will take longer.
On the question of supplementing the multilateral process with bilateral and plurilateral engagements, Mariann Fischer Boel, Agriculture Commissioner of European Commission was not against the bilateral initiatives. She said, For me, it is important that we get a multilateral solution. Bilateral initiatives are fine. We cannot substitute multilateral system with bilaterals because you will never be able to discipline domestic support by bilateral engagements. On the possibility of Doha Round being concluded in 2010, she said, The sooner, the better, because we are in a situation where we do not want to see the ugly head of protectionism as this would prolong the global downturn. Hence we sincerely hope that the deal is concluded as soon as possible. As far as taking care of development of poorer countries, she said, Development is an important aspect of Doha process. First of all, to create wealth and trade is a wealth creating tool. We should give special access to the least developed countries. We have been giving duty-free market access to least developed countries since 2001.
China, too, has objected to introduction of bilaterals, as proposed by the US, who wants the bilateral talks to be accorded importance in concluding the Doha talks. A senior trade official from China said while the country was ready to clarify on market access issues, it was opposed to negotiating these during the bilateral meetings. China, for example, said it was important to have a strong outcome on farm subsidies, an area in which the United States is not prepared to agree for real and effective cuts. Beijing also maintained that the Doha market access talks were based on formulas and disciplines but not request and offer, as was the case in the previous rounds of trade negotiations. China also insisted that self-designation of special products is part of the mandate and that it is not obliged to inform what it would do. Further, China said that sectoral tariff elimination in industrial products was based on voluntary framework and not on a mandatory basis.
Anand Sharma, Commerce Minister has contested the views of Pascal Lamy and some other countries like China and Brazil that most of the issues of the Doha round of trade talks have been settled. Said Sharma, In some quarters, it has been suggested that most issues have been settled and we are almost in the endgame. However, if we look at the text modalities on agriculture and non-agriculture market access (NAMA0 alone, it would be apparent that there are still gaps and a number of unresolved issues. This also reflects Indias determination to adopt a tough stance on agriculture and NAMA, key to its industry and farmers.
India would not let the negotiations on services and other issues such as anti-dumping rules and disciplines on fishery subsidies to be relegated to the sidelines. In July last year, a mini-ministerial on the ongoing Doha Round had broken up due to disagreements over the level of protection to be accorded to developing countries against imports and whether countries eliminating tariffs in select sectors should get flexibilities in other areas. Sharma clarified, All these issues need to be extensively discussed at the technical level of senior officials. This will take time and needs to be factored in when we decide on a schedule for ensuing months to determine when agri or NAMA modalities can be meaningfully concluded. India has also demanded that market access talks on industrial goods should be based on the parameters mentioned in a draft agreement released by WTO in December 2008.
When the ongoing Doha Round of talks broke down in July, 2008, two issues that were identified as the deal breakers were the special safeguard mechanism for protecting developing country farmers and the sectoral negotiations on NAMA apart from a new element of global economic recession and taking Least Developed Countries (LDCs) on board on all WTO issues. While the US and some food exporting countries wanted to allow developing countries to increase tariffs beyond ceiling levels only when import surges were very high, India and other developing countries wanted lower trigger points. In the discussions related to eliminating tariffs in certain identified industrial sectors, while the US wants to make participation mandatory by linking it to other flexibilities including lower reduction in average tariffs, India and some other countries wanted it to be strictly voluntary.
What are the possibilities of the outstanding issues to be settled.
Special Safeguard Mechanism (SSM)
When the tug of war was going on between the developed and the developing countries in July last in Geneva, with the developing countries, mainly India pitching for 110% surge being the trigger point to apply SSM, the developed countries, mainly the US, wanted it to be at 140-150% surge. Then Pascal Lamy had suggested the figure of 120%, as a compromise point, to which neither bloc agreed. When confronted with the question that the SSM should be made more easily implementable with developing countries getting to control the impact of sudden agricultural import surges, Pascal Lamy said, Everyone is clear that developing country farmers should be shielded from big import surges. Everyone is equally clear that exporters including many in other developing countries should not have normal trade flows disrupted by injudicious use of a safeguard. These two points are acceptable to everyone. The question is how that should be accomplished. We have a bit more work to do on the architecture including how to ensure that the SSM can be employed easily, but not abusively and on the numbers. But negotiators are working on this and a solution would be found.
India and other developing countries have been insisting on sectoral negotiations, so that some agreements are arrived at which will provide the negotiations with some notable gains for all concerned. However, the developed countries are not keen on that at all. In any case, any meaningful discussion and agreement on this important aspect cannot be ignored for long.
LDCs on Board in WTO
Another important issue in the WTO and Doha Round has been the interests of Least Developed Countries (LDCs). It has generally been believed that the interests of LDCs have not been taken care of. When this point was brought to the attention of Pascal Lamy, he said, The issue of LDCs may not get much attention in newspapers, but in WTO, these issues are on the front line. LDCs have already succeeded in making the case for much of what they originally sought-this is why they are the most vocal about concluding the Round. LDCs are not required to reduce tariffs or subsidies, nor to make offers in services. We know the LDCs will receive duty-free, quota-free treatment in development countries for at least 97 per cent of their exports. We know that in cotton-a product of considerable interest for many LDCs-subsidies will be cut even more de4ply and faster than for other agricultural products in developed countries and that exports to those countries will be duty-free and quota-free,. LDCs would like the cotton issue resoled and agreement implemented right away. These questions would be taken care of.
Economic Slowdown and Doha Round
It is a matter of fact that with the global economic slowdown, there has been a growing proclivity for protectionism, which has also cast its shadow on the Doha Round and that with this, WTO negotiations could take a back seat. In fact, once the protectionism takes over, Doha Round and all that noble principles on which WTO is founded would get a severe beating. However, Pascal Lamy does not agree with that. He said, The recession has made concluding the Round more difficult in some ways, but also more imperative to contribute to growth and ;thus to development. He said, The reason we have not been able to conclude the Round is because we have a long list of 20 complicated topics on the negotiating table and we have over 100 members participating actively. This is without precedent. Moreover , many of the areas where convergence is needed are complex and politically very sensitive. Special Safeguard Mechanism (SSM) is one, the sectorals another, but so too are fisheries subsidies, Mode 4, anti-dumping or trade and environment. But these difficulties are not insurmountable. We can get to deal with leadership, flexibility and a sense of common endeavour, which are at the heart of multilateralism.
Without disputing that there have been some cases of protectionism here and there, Pascal Lamy said We have to be vigilant against turning more aggressive in this area. But to date, the governments have not applied sorts of heavy-duty protectionism that so crippled the global economy in the 1920s. They have not, largely, because WTO rules constrain them from doing so. Instead they used a series of lower-intensity measures which are within the scope of WTO rules, at least for the most part. We know that if we are to keep trade open, we have to keep opening trade, and so, that is what we are trying to do. Intellectually, ministers know this. Economically, it makes eminent sense, but in many governments, further trade opening at this time is not easy politically.
Sizing up the present and future scenario, Australian Trade Minister Simon Crean, said, This meeting is important for two reasons-it is a reinforcement of Indias re-engagement in the process and it is a meeting which has the nearest proximity of the G-20 summit. Doha Round of talks should be close to being concluded with almost 80 per cent of trade discussions completed last year and only the rest 20 per cent remain elusive. Significantly, we have seen the emergence of commitment by two significant players-India and the US.
Harsha Vardhana Singh, Deputy Director General of WTO said that an early agreement on a global trade deal will only be possible with co-operation of all the countries. A successful conclusion has a lot to offer in terms of sustainable solutions.
Importance of Doha Round
A successful Doha Round conclusion is of paramount importance to the world as a whole, particularly when the global economic downturn is ebbing away. According to study undertaken by Person Institute for International Economics, a successful Doha Round trade deal could boost the global economy by $ 300-700 billion a year.
It will be pertinent to quote what Pascal Lamy has said, in his recent inaugural remarks at Thinking Ahead on International Trade Conference on Challenges Facing the World Trade System on 17 September 2009, We cannot discuss change and the challenges the future in isolation from full recognizance of the present. We cannot simply look ahead and set aside what we have on our plates today. The viability of the multilateral trading system, the order and predictability that underwreit4s it, and the economic prospects of countries around the world, depend on our ability to finish what we started at in the closing months of 2001-the Doha Round. We have been close, and I believe we are enclose enough, and sufficiently like-minded, to make closure possible. But we shall have to do some more hard work, and close the remaining gaps.
In a game of chess, there are 10 moves for an overture, 15 moves in the middle game and about 60 moves in the end game. To my mind, we are in the endgame after having dwelt, dealt and discussed and settled many of the numerous issues involved in Doha Development Round, but are certainly not not near the end game as assessed by our learned, but newly initiated Commerce Minister Anand Sharma while being near to Brazils External Affairs Minister Amortims assessment of being in the end game, which could even take very long to happen.
The views presented are author's personal views. Here 'I' refers to him