By David Jessop
The Doha Round at the World Trade Organisation (WTO) is deadlocked. Although officials and ambassadors continue behind the scenes to negotiate building blocks for an eventual agreement, there is the sense that the political will required to re-energise the process does not exist.
So much so that in Geneva there is a view that so radically has the international trade landscape changed in the nine years since the process was launched, that the shape of any final deal will now require many if not all states to reconsider the effect of the offers they were prepared to make previously.
Since the Round began in Doha in 2001 world trading patterns have changed. The economies of advanced developing nations have been growing rapidly while in contrast those of the developed world that came close to systemic collapse in 2008,have since only slowly come out of recession.
Across this period China, India and Brazil have continued to industrialise, grow and trade. They have become members of the G20 and have penetrated developed and developing markets alike. As a consequence many of the eventual trade-offs envisaged by the US, Europe and others to achieve a trade round may no longer be sound, requiring it is suggested the developed world to examine the political implications of this structural change in the global balance of trade and economic power before proceeding; and for Washington and Beijing in particular to first consider when and how it might be possible to move forward again.
The result is that the focus in trade liberalisation is now shifting rapidly to bi-lateral and bi-regional deals such as those that Europe has recently struck with Central America and with Andean nations, or that which the Caribbean is negotiating with Canada. These are likely to multiply, leaving some trade officials to wonder whether a whole new negotiating arena may have to emerge to reconcile such arrangements before any global deal can take place.
At the same time it also seems that many developing nations that were previously comfortable with the general thrust of the Round, if not with its fine detail, may also be having concerns about the rise of China, India and Brazil and the impact they as opposed to the developed world will have as their tariffs are reduced. All of which leads to a privately held view in some parts of the WTO that the only way forwards multilaterally may be through limiting ambition and going for less than a full round.
As for the Caribbean, its position, like that of many developing nations, is to wait and see.
On the whole, the Caribbean’s experience of the way the WTO system works has not been that positive.
The WTO process has been bruising. Other nations, notably in Latin America, have sought to challenge the region’s established preferential arrangements with Europe in respect of bananas, sugar, rum rice and other products; and Caribbean ministers have until relatively recently found themselves effectively ex-cluded from the key political decisions which are dominated by OECD nations and more recently the emerging economies of Brazil, China and India.
The one important victory that the region has been able to achieve was the WTO’s decision in 2004 to rule in favour of Antigua and against the United States in a dispute over the provision of internet gaming services. In outline this involved the WTO accepting on appeal Antigua’s claim that the US had damaged its interests by adopting measures which affected its cross-border supply of gambling and betting services. Following a ruling in early 2007 that the US had done nothing to abide by its judgement, Antigua filed a claim at the WTO for US$3.4 billion in trade sanctions linked to a request for authorisation for the island to ignore US patent and copyright laws.
However, since that time there has been no final resolution of the issue. Speaking recently to the Caribbean media, Antigua’s Prime Minister, Baldwin Spencer, expressed serious concerns about Washington’s non-compliance, and indicated that it was his intentions that the island would impose sanctions on the US and that he would take the matter to Caricom Heads of Government.
However, Caribbean Heads while expressing ‘strong solidarity’ and concern about the negative economic impact non-resolution was having, coupled this with language that seemingly implied that the region was concerned that any such response might bring the region into conflict with the US Congress in relation to the ten-year extension of the Caribbean Basin Trade Partnership Act to 2020 or the recently launched Caribbean Basin Security Initiative.
What such sanctions might consist of or how they could be imposed without hurting Antigua economically is unclear, but the failure of the WTO process to be able to bring the issue to a conclusion with the US has consequences that go far beyond Antigua’s heated internal politics.
Bringing the case to a successful end is important not just for Antigua but for all small states. If the US requires adherence to a rules based system but then fails to meet its commitments at the WTO it brings the whole concept into disrepute. Worse it means that the Caribbean and other nations are participating in WTO proceedings on a false premise.
If, as seems to be happening, the dynamics of world trade have changed, small states have even more need of proof that that the body’s rules have teeth. While a less ambitious round may be a way forwards in the interim, small states require assurances that cases of the kind Antigua has brought, or that others in the region may be considering, result not in delay but in a just outcome.
David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org
Previous columns can be found at www.caribbean-council.org
