WTO Doha Round: Indispensable or Irrelevant?

2 March 2011

The Doha Round negotiations at the WTO: indispensable, or irrelevant?

According to former EU trade commissioner Leon Brittan, the fate of the struggling multilateral trade talks is no less than the canary in the coalmine signalling whether the world's governments might prove able to cooperate on more complex geopolitical and environmental challenges.

Speaking at WTO headquarters in Geneva on Wednesday, he said with governments already in agreement on "80 to 90 percent of what will constitute the final deal," failure to conclude an accord could have "defining consequences" on governments' capacity to tackle challenges collectively. "The shockwaves of any failure would be felt for a long time," he warned. New negotiations would not be opened any time soon, leaving a growing gap between international economic rules and international economic realities.

A markedly different view came this week from the White House: the US president's trade policy agenda for 2011 warned that the Doha Round negotiations risked irrelevance if they failed to do more to open up the markets of large developing countries like China, India and Brazil.

"For these talks to remain relevant, they must address the world as it is and as it will be in the coming decades," argued the jobs-focused agenda, prepared by the US trade representative's office alongside a report on developments in the country's trade relations over the past year.  "Our requests of key emerging economies will continue to be based on the reasonable proposition that countries with rapidly expanding degrees of global competitiveness and exporting success should be prepared to contribute meaningfully towards trade liberalisation."

The agenda reflected the stance taken by US trade negotiators over the past two years: that large, fast-growing developing countries must offer greater market-opening for manufactured goods, farm products, and services, if they want an agreement sellable in the US Congress. China, India, and Brazil have generally rebuffed the US's demands as disproportionate to the reforms Washington is willing to undertake, particularly on farm subsidies.

The US report, released on Tuesday, argues that "the world has changed" since the mandate for the Doha Round negotiations was fixed in 2001.  "The remarkable growth of

emerging economies like China, India, and Brazil has fundamentally changed the landscape," it argued, calling on "these emerging economies to accept responsibility commensurate with their expanded roles in the global economy."

Brittan, who has been travelling around the world to drum up support for a Doha deal since becoming an advisor to UK Prime Minister David Cameron last year, was far more enthused about the market-opening on offer at the WTO. He argued that even the proposals currently on the table would represent "in terms of market access, the most ambitious multilateral trade round ever."

As EU trade commissioner, Brittan was at the centre of the conclusion of the previous round of global trade negotiations, known as the Uruguay Round. In the late 1990s, he played an instrumental role in setting the stage for the launch of a new round of multilateral talks, which became the Doha Round.

While US and European business groups were vocally supportive of the Uruguay Round, which delivered new global rules for services trade and intellectual property protection alongside industrial market access, they have been notably lukewarm about the current round of negotiations, a fact that many have blamed for its long stagnation.

Brittan said that while the international business community was supportive of the Doha negotiations, it was not giving it the priority it deserves, especially in the US. He said that he had been pushing US businesses to lobby their government in favour of the WTO talks, and added that he had been asking multinational corporations to express support for a Doha deal in countries where they have a significant commercial presence.

Talking with leaders in Latin America, Asia, the US, and Europe has persuaded Brittan to shed some of his gloom about prospects for a Doha Round deal. "Everyone sincerely wants to conclude the round, and would be prepared to do a bit more to do it," he said. The problem is that in order to offer up new concessions, everyone needs to do it simultaneously. "How do we get the carousel turning?"

Even if the carousel does start turning, it remains unclear whether Washington will be able to settle for what Brazil, China, and India are prepared to give, and vice-versa.

The president's trade agenda specifically calls for China to sign onto sectoral liberalisation initiatives for manufactured products "such as chemicals, information technology and industrial machinery." The US's insistence on the importance of sectoral initiatives has been controversial because of the negotiating mandate's specification that participation in them is to be voluntary. In addition, the report's section on prospects for 2011 in the WTO agriculture negotiations says that "the linchpin to Doha Round success will remain securing meaningful market access commitments," but makes no mention of farm subsidy cuts, a key priority for Brazil and many other developing countries.

Meanwhile, a Brazilian foreign ministry official last week said Brazil would not "do a bit more" in the Doha Round negotiations unless it received new concessions on agriculture.

Tovar Nunes, a spokesman for Brazilian Foreign Minister Antonio de Aguiar Patriota, said that Brazil was ready to work on the basis of terms for subsidy and tariff cuts discussed in the second half of 2008 - the same terms that the US has deemed inadequate - but would not make any new offers.

"It is unfair at this stage to ask countries like Brazil to increase liberalisation - unless there is movement in agriculture, but that is not likely," he said, reports Dow Jones.

Brazilian officials have complained that the sharp appreciation of their currency, the real, has already "wiped out" much of the protection afforded to manufacturers by tariffs, making additional concessions "unrealistic."

ICTSD reporting; "Brazil Can't Make New Concessions As WTO Talks Proceed - Spokesman," DOW JONES, 24 February 2011.

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