1. Time for Parallel and Alternative Paths?

7 September 2009

Despite ringing calls for a swift conclusion of the Doha Round from various high-level gatherings, a number of countries are looking for parallel and alternative venues to advance governance of trade.

Many trade negotiators say the main factor holding up progress at the WTO is the United States' lack of engagement. US negotiators and constituencies have repeatedly insisted that they need more clarity on market access gains post-Doha, but other parties to the negotiations contend that it is not clear precisely what Washington is seeking. More broadly, with healthcare reform and climate change topping the political debate there, combined with strong protectionist sentiment fuelled by the recession, it is evident that trade liberalisation is low on the administration's totem pole. For instance, at the time of writing the key post of chief US agriculture negotiator was still vacant.

President Obama is expected to unveil his long-awaited trade policy agenda before the G-20 major economies September summit in Pittsburgh, but this may not prove as detailed as some have hoped. US Trade Representative Ron Kirk said the statement was likely to be "more an illumination of how this president, this administration, see trade as an integral part of our overall economic strategy."

The administration faces strong pressure from congressional Democrats, who have proposed a Trade Reform, Accountability, Development and Employment (TRADE) Act, characterised as "a bill that would mandate trade pact reviews, establish standards, protect workers and help restore congressional oversight of future trade agreements." Among other things, the bill would require Congress to vote on any agreement before it can be signed. The draft bill has been endorsed by 114 Democrats and two Republicans in the House of Representatives.

What Can Pittsburgh Deliver?

Considering the scepticism expressed by many WTO delegates on the call to conclude Doha in 2010, it is somewhat ironic that they are now waiting for a signal from another summit: the G-20 leaders' meeting in Pittsburgh (see page 5). It may be difficult for the group to come up with something that will give the negotiations a decisive jolt, since no country appears to have changed its position on substance in recent months.

For example, this summer India's Commerce Minister Anand Sharma told journalists that the special safeguard mechanism (SSM) was "not for negotiation as it concerns the livelihoods of poor farmers." The last serious attempt to conclude a framework agreement on agriculture collapsed in part because India and the US could not agree on how much developing countries should be allowed to raise farm tariffs to ward off import surges under the SSM. Mr Sharma also said that developed countries would have to "revisit the subsidy dossier in the Doha agriculture package." EU Agriculture Commissioner Mariann Fischer Boel's response was unequivocal: "We have tried our very best and we can't move."

Growing Focus on Bilaterals and Other Alternatives

For many countries, including some of those that endorsed the G-8 statement on concluding Doha in 2010, Plan B consists of shifting attention to bilateral agreements. After signing such a pact with Panama in August, Canadian Prime Minister Stephen Harper said: "We've all recognised for some time that the future of the Doha Round is uncertain. That doesn't mean to say it's hopeless, but certainly it's stalled. It is in Canada's interest, in a world of expanding trade agreements, to make sure we're part of the game."

Speaking at a business conference in Johannesburg on 7 August, Secretary of State Hillary Clinton struck a similar note. She said the Obama administration remained "committed to completing the Doha Round, but if that is not successful - and there are many obstacles to overcome to achieve that - then we want to work on a bilateral basis to develop even further trade opportunities between South Africa and the United States." At the question and answer session that followed the event she also said that some WTO rules "could use some rethinking and revising in light of what's happening in the world today. I also believe we should strengthen the ILO, the International Labour Organisation's rules, because we want to have a tide that lifts all boats and not have people taken advantage of in the labour market."

Even Brazil seems to be having serious doubts. On 31 July, São Paulo-based Valor Econômico quoted the country's trade chief, Celso Amorim, as saying that Brasilia did "not see any clear sign that the main actors are engaged in the Doha Round." This, the financial newspaper said, made it a greater priority for Brazil to conclude an agreement between Mercosur and the EU. Negotiations between the two blocs started in 1995, but they proceeded fitfully and eventually stalled as both sides concentrated their efforts on the multilateral front in Geneva. Minister Amorim expressed regret over the lack of progress at the WTO, but said that the "uncertainties in relation to the round oblige us to seek this [EU-Mercosur] agreement."

China, another supporter of wrapping up Doha in 2010, has also aggressively sought (and concluded) bilateral and regional trade agreements in Asia and Latin America.

There are also signs of countries seeking fora other than the WTO or bilateral agreements to move their trade-related agendas. For instance, a controversial plurilateral intellectual property agreement is under negotiation independently of any institution, and it has been suggested that similar negotiations could be held on services liberalisation.

Casting for a New WTO Blueprint

While WTO Director-General Pascal Lamy keeps insisting that Members should concentrate their energies on completing the round, many are exploring other paths to strengthen multilateralism and advance their trade and development interests. The upcoming ministerial conference in November offers an opportunity for guidance in this regard.

India has made a number of suggestions that ministers could pick up to improve the ‘functioning and efficiency of the WTO'. In view of the proliferation of bilateral and regional trade agreements ministers could, for instance, call for the elaboration of best practice guidelines for such negotiations and request the secretariat to produce factual annual reports. Based on the trends detected in the reviews, the Committee on Regional Trade Agreements could then examine ways to reduce the adverse impact of regional agreements on multilateral trade. This would not only allow Members to gain greater insight into such agreements, but could help the multilateral trading system influence their evolution.

India also proposed that the WTO should develop a new legal instrument that would gather together all existing provisions on preferential market access for least-developed countries. This would clarify the situation for both the recipients and the grantors of preferences, as well as simplify overlapping procedural requirements.

With the quasi-obsessive focus on advancing the round, work in the WTO's regular committees has lost relevance. These bodies could be revitalised and made more responsive to Members' needs in a variety of ways, India suggested. For instance, ministers could request them to monitor trade developments in their area of expertise, much in the way that the more general protectionism reports issued by the secretariat do (see page 4). The WTO's tariff database could also be improved with the inclusion of non-tariff measures, such as technical standards or health regulations that affect trade. Many consider that such measures are increasingly overtaking tariffs as the major market access hurdle for developing country exports in particular.

Some countries would also like to see greater emphasis on other pressing issues, such as the vexing question of how WTO Members could deal with their industries' competitiveness concerns if they are to take on costly greenhouse gas reduction commitments.

This article is published under
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