To have or not to have a round: WTO at crossroads

9 December 2011

The ten year long saga of the WTO Doha Round continues.  While some claim that the Round is practically dead and hence should be buried to avoid putrification of the corpse [1], others remain optimistic.  There is also a growing view that continued viewing of the WTO through the prism of a stalled Doha Round will irrevocably damage the credibility of the multilateral trading system.[2] Views and analysis also abound on the reasons for the failure to conclude Doha Round and many suggestions are on hand to address these.[3]This article is certainly not an attempt to even summarise all these commendable efforts and opinions.  Instead, it aims to present a broad view of the situation in relation to the WTO and Doha Round with a view to making some recommendations in preparations for the forthcoming WTO Ministerial Conference scheduled to be held in Geneva, Switzerland from 15-17 December 2011.  The article starts with some history, goes on to objectively analyse the outputs and outcomes of Doha Round so far in a changing global scenario, and then looks at the critical role of the WTO with or without Doha Round.

To better understand the reasons for the current stalemate, it is useful to re-visit some of the debates that preceded the launch of the Doha Round.

  • From the first WTO MC in Singapore in 1996 till the adoption of Doha Ministerial Declaration launching the Round in December 2001, many developing countries were against the launch of the Round. They argued that the so-called built-in agenda of the WTO (negotiations on agriculture and services from 2000 and several reviews of other agreements already mandated) were enough to keep all "busy" and to keep on the liberalisation agenda moving forward.  Furthermore, the WTO was a permanent institution with its clear mandate including on negotiations, unlike its predecessor the GATT which was a provisional arrangement and hence required a mandate of its Contracting Parties to launch any negotiations.  The main demandeurs were the agriculture-centric countries - on the one hand the EU, supported by some other European countries and Japan who wanted addition of other issues to sweeten the bitter pill of agriculture in the built-in agenda, and on the other the main agricultural exporters of the Cairns group who apprehended only marginal improvements in agricultural trade reform if other issues were not added to make it palatable to the EU, Japan, et al.

  • The primary role and responsibility of the WTO, it was stated repeatedly, was to provide a stable, predictable and conducive environment for the conduct of international trade.  Hence the critical role of its regular Councils and Committee including the Trade Policy Review Body (TPRB), the Dispute Settlement Body (DSB), the General Council (GC), and the two-yearly Ministerial Conferences (MCs).  Negotiations for further liberalisation and updating the WTO rulebook were only meant to strengthen this primary function.

  • There was also some disquiet regarding the concept of a single undertaking (SU), its practical implication being that all Members, big or small, were required to participate in all WTO discussions and negotiations, and undertake commitments.  While conceptually sound and a bulwark against free riding by some, it was difficult to imagine how such a principle could operate without either everyone agreeing to move at the pace of the slowest Member or messy and prolonged negotiations among all.

The above recap is intended to link the current debate with a longer and complex history.  However, it is also true that the decade-long Doha Round negotiations offer invaluable experience and lessons which should be weaved with history to chart a better way forward.  Moreover, this has not been a wasted effort.

It may not be common knowledge but there are areas in which the Doha Round has already yielded some concrete negotiated results though some of them may not have been fully implemented yet.  A non-exhaustive list of these positive outcomes includes:

  • General Council Decision of 30 August 2003, and the subsequent amendment in the TRIPS Agreement under a December, 6, 2005 Decision related to flexibilities to deal with public health issues
  • In principle agreement to establish a Monitoring Mechanism for special and differential (S&D) treatment provisions
  • A Transparency Mechanism for regional trade agreements (RTAs) established through a General Council Decision of December 2006 and operationalised on a provisional basis
  • Agreement at Hong Kong Ministerial Conference in 2005 to ensure the parallel elimination of all forms of agricultural export subsidies and disciplines on all agricultural export measures with equivalent effect by the end of 2013

There are several other less visible achievements.  One, the painstaking negotiations have dealt with a number of new concepts, built an impressive inventory of technical work, and have already led to many political compromises.  There are examples of such achievements in all areas of negotiations, Special Products (SPs) and Special Safeguard Mechanism (SSM) in agriculture, hybrid approach to identify environmental goods and services in trade and environment, mandatory technical and financial assistance in trade facilitation, measures to deal with preference erosion in agriculture and non-agricultural market access (NAMA), and special provisions for Small, Vulnerable Economies (SVEs) in agriculture and NAMA, to name some.  All these required a lot of substantive work as well as political compromises many of which were not even on the table when Doha Round was launched.

Two, while adhering to the principle of single undertaking, the diversity in the needs and capabilities of various Members has been taken into account through proposed differentiated treatment for various groups of countries (and even individual Members in some cases) in various draft modalities.  It can be regarded as a key departure from earlier practice and its importance for the future cannot be belittled.

Three, the Doha Round has contributed to the capacity of developing countries to deal with trade policy issues both at the national and multilateral levels, including negotiations.  These improvements in capacity have resulted from greater investment in trade-related capacity building by both the developing countries and their development partners, often in the context of Doha Round.

The above is not to claim that Doha Round has been a success.  Instead, it is an effort to point out the valuable substantive, political and capacity improvements that can be linked to Doha Round but also have relevance beyond the Round and should be capitalised to strengthen the multilateral trading system.

It is critical to recognise in this context that the multilateral trading system (MTS) and the Doha Round, though institutionally linked, are not one and the same.  In fact, at the time of the launch in 2001, the MTS as represented by the WTO was the main enterprise - with Doha Round being only one if its initiatives, though perhaps the most important one.  As briefly outlined earlier in this article, the WTO as an international organisation has several important functions, including providing a permanent forum for negotiations among its Members for mutually advantageous outcomes.  The WTO framework also provides sufficient flexibility and room to deal with new situations.  For example the Trade Policy Review Mechanism mandate relates to the periodic, peer review of WTO Members' trade and related policies but it has been innovatively and effectively used to provide a means to monitor Members' "protectionist" responses to the economic crisis since 2008.  Rounds of negotiations can support these functions but should not be allowed to supplant them.

In conclusion, when ministers meet at WTO MC8 in Geneva in December this year, they should neither focus exclusively on reviving the Doha Round nor pretend to ignore it (as was attempted at the last WTO MC in December 2009).  Instead, a balanced and calibrated approach is needed to strengthen the MTS.  Viewed from this perspective, the following issues should be on the agenda of the MC8:

  • Regular WTO Work: Informed and structured discussion of the regular work of the WTO with a view to giving it more prominence and substance. As argued in the article, this work is valuable and must be put on the forefront.

  • Doha Round: Identification of negotiated outcomes from the Doha Round, with a focus on development, that can be accepted by all for implementation (with particular emphasis on issues of interest to LDCs); and identification of issues where negotiated outcomes can be expected in the near future. This should be complemented with guidelines on a methodology that is derived from the experience of Doha Round.

  • Systemic Strengthening of the MTS: Inventorisation of important outputs, outcomes and lessons - including both the technical substance and political compromises - from the Doha Round. This will preserve the achievements and allow for appropriate capitalization to strengthen the MTS at an appropriate time. This agenda item should also include identification of systemic issues of relevance to the MTS with a mechanism to debate these in the WTO

Author : Rashid S. Kaukab is Associate Director and Research Coordinator, CUTS Geneva Resource Centre.  This contribution is based on his personal experience of involvement with the WTO and Doha Round in the last 16 years and has been written in a personal capacity: it does not in any way reflect the views of CUTS.

1 See, e.g. Jean-Pierre Lehmann in the Financial Times of 24 August 2011.

2 For example, see a statement by Pradeep S. Mehta, Secretary General CUTS International  here.

3 See, for example, a recent Briefing Paper by CSEND entitled "Doha stalemate: Implications and ways forward" here , Bhagwati and Sutherland Report (2011), "The Doha Round: Setting a deadline, defining a final deal", available here, Patrick Messerlin's "Polly Wants a Doha deal" available here, and Ambassador Ujal Bjatia note available here.

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