On April 29, the so called Doha Development Round of the World Trade Organisation all but died. Its demise went almost unremarked, with little or no media interest, and with few to publicly question the enormous amount of time, intellectual effort and money that has gone into the process since it first started in November 2001 in Doha.
At the end of last Month, the WTO’s Director General, Pascal Lamy, made clear at an informal meeting of the WTO’s Trade Negotiations Committee – the body that oversees all of the many topics in the Round’s negotiations – there were blockages in almost every key negotiating arena.
Although the WTO Director General said that he would report back to the next meeting of the full membership on 31 May as to how to respond, it had been apparent for many months to almost all Ambassadors, experts and Observers in Geneva that no political will exists to bring a comprehensive trade round to a conclusion.
The reasons for this are complex but at the highest level it relates to fundamental political differences between states about how the world economy and by extension global power, might be rebalanced through trade liberalisation. These differences have been especially acute between the rapidly growing economies of India, China, Brazil, those in relative decline such as the United States and Europe and the many smaller developing states that have been damaged by the recession and high food and energy prices.
What happens now is far from clear as no Government has yet been prepared to call in public for an alternative or less ambitious approach to the comprehensive multilateral trade agreement that was envisaged.
At the April 29 meeting, a number of possible outcomes were referred to. These were a ‘business as usual’ or a ‘continuing as before’ approach; ‘stopping and starting from scratch’, described by some as ‘rebooting’; and what Mr Lamy described as ‘drifting away’, a process in which failure and the process is ignored by an ever increasing number of nations.
Despite this, Mr Lamy is now consulting with WTO members who have begun to consider in private other possibilities.
One option being discussed is to identify a number of easier negotiating issues and bring these to a conclusion in order to reach a stand-alone agreement. This approach envisages setting aside divisive issues relating to agriculture and industrial goods. However, email exchanges between experts on this subject suggest that it is likely to prove difficult to get WTO members to agree on what the ‘easier’ negotiating issues should be.
An alternative, supported by China and others, but probably not the United States, would focus on delivering some sort of agreement that offered duty and quota free market access to exports from Least Developed Countries (LDCs) and, according to the specialist newsletter Bridges, a waiver that would authorise discrimination in favour of LDC service providers.
A further scenario that is being suggested is an informal suspension of the Round during which specific concerns of developing nations might be addressed.
However, all of these scenarios require political will and a deep and continuing commitment by all WTO members to multilateral trade liberalisation; attributes which have been lacking since 2008 for practical reasons. These include the real politik associated with the electoral cycle in the US, and a pervasive sense that the rapidly changing global economic balance between the BRICS (Brazil, Russia, China and South Africa) and OECD nations, makes it much less certain than in 2001, which nations will be the winners and losers from any global economic agreement.
For these reasons, distrust between the EU, the US and , China, Brazil, and India, and between the rest of the WTO membership is becoming corrosive as the recognition dawns that some nations now have in private a very different perspective to that which prevailed in Doha on what the round should seek to achieve.
For example the United States believes that present disagreements go far beyond the technical. It feels that there are a matrix of issues in which its objectives in relation to agriculture and services and even in the area of trade facilitation cannot be met. It has welcomed the approach of the European Union in trying to find a way forward by narrowing the gaps in key sectors such as chemicals, machinery and electronics without which it believes it will not be possible to conclude the round in its current form.
China, however, has different concerns. It believes that the development objective of the Round has been marginalised, and feels that in the absence of a full agreement that it ought to be possible to reach a ‘fair’ agreement on issues of interest to least-developed countries. It points to a fundamental divide between developed and developing nations suggesting that the EU approach serves only the interests of industrialized countries.
Problematically, Geneva and the WTO negotiations have become a sideshow.
Globally many political leaders have lost interest as domestic economic difficulties and new disparities in the relative economic wealth of nations have lessened their belief in a multilateral negotiated agreement in favour of more beneficial and strategic bi-regional and bilateral free trade agreements.
As a consequence it is far from clear what if anything will be done to resuscitate the Geneva process before the fundamental changes taking place in the world economy run their course and a new balance is achieved.
Any future agreement would also seem to require both the older global powers and the fast growing advanced economies to recognise that they will have to agree not to allow their shared economic power to marginalise further the developing world and especially nations such as those in the Caribbean that account for less than one per cent of global trade.
In the Caribbean these developments in Geneva have important implications as they may become the last nail in the coffin of the belief that the future lies in trade liberalisation and the loosely regulated market driven economic policies of the Washington consensus.
It is probably time to give up on trying to save Doha.
David Jessop is the Director of the Caribbean Council and can be contacted at david.jessop@caribbean-council.org
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