Discussions
What to do about Doha?
Sean Woolfrey, a tralac Researcher, discusses the question: ‘What to do about Doha?’
The latest deadlock in the Doha Round of multilateral trade negotiations raises serious questions about the future of the Doha Development Agenda.
Towards the end of last month, at an informal meeting of the WTO Trade Negotiations Committee, ambassadors from WTO member states conceded that they would not be able to agree on an ‘LDC-plus’ package by the time of the eighth WTO Ministerial Conference to be held in Geneva in December. This development is a significant blow to the prospects of the current Doha Round of WTO trade negotiations, which marks its tenth anniversary this year, as the proposed ‘early harvest’ was widely viewed as the best strategy for maintaining some sort of momentum in the negotiations.
Earlier this year, to nobody’s great surprise, it was made clear that due to a lack of political will on the part of important member states, it would not be possible to finalise a comprehensive Doha package by the end of the year. It was agreed that the rest of 2011 should be focused on delivering an early harvest package, which was to have at its core, issues of particular importance to least developed country (LDC) members. These included duty-free quota-free access for exports to wealthier markets, simplified rules of origin, reductions in cotton protection and a waiver on commitments in services trade.
Concern was raised by certain non-LDC members at the time, however, that these commitments alone would not address the issues of importance to their constituencies, and that therefore a ‘plus’ element of issues needed to be included in the early harvest package. The ‘plus’ side of the equation was to include issues that were considered either not particularly contentious or close to resolution, such as trade facilitation, export competition, liberalization of trade in environmental goods and a monitoring mechanism for special and differential treatment.
It was hoped that agreement on an LDC-plus package by the time of December’s ministerial would not only demonstrate the possibility of delivering results on the Doha Development Agenda, but would also ensure that the negotiations maintained a certain degree of momentum heading into their second decade. The recent failure to make any headway on this early harvest package and the concession that it will not be deliverable by December demonstrate, however, what a dire state the Doha Round is in. It appears that the impasse over the LDC-plus package resulted not only from disagreement over exactly which issues should be included in the ‘plus’ side of the equation, but also from dissent among members over the extent of the LDC-specific issues. The lack of political will to ensure progress over even these seemingly non-contentious issues casts doubt on the potential for a successful conclusion of the Doha Round.
Given these developments, the Director General of the WTO, Pascal Lamy, has suggested that work towards the Ministerial Conference in December should now focus on non-Doha WTO issues and on outlining an agenda for the negotiations post-2011, rather than on attempting to salvage some sort of scaled down package. Although some WTO members, such as China and a number of African states, feel that efforts should still be made to try and bring about an early harvest package so as to ensure momentum in the talks, it is the view of Lamy, and of member such as the US, that doing so would run the risk of crowding out essential non-Doha WTO work. Thus it looks likely that December’s ministerial will resemble the ministerial in 2009 where Doha issues were largely put to one side in order to focus on WTO ‘housekeeping’ issues.
The numerous setbacks this year in the Doha negotiations have, unsurprisingly, raised broader questions about the future of the round itself. Numerous commentators have given suggestions as to the best way forward, and these can be simplified into three broad strategies. The first strategy is to continue with the current negotiations in the hope that a comprehensive deal will eventually be concluded. Given the lack of political will currently being shown by important member states towards concluding such a deal, and the widespread belief that an early harvest package by the end of this year would be a vital step in ensuring the successful conclusion of the negotiations, it appears that proponents of this strategy may be overly optimistic with regard to the likely success of continued negotiations.
The second potential strategy that has been raised is that of declaring a temporary suspension of the current negotiations until after next year’s elections in the US and change of leadership in China, as this may prove a more conducive time for negotiations. Such a move would be politically expedient for some of the larger WTO members, but carries a number of potential problems.
- First, such a move may be viewed as simply a circuitous way of killing the Round.
- Second, given the ever-changing nature of the world of trade, every delay makes the possibility of compromise based on existing frameworks less likely.
- Third, it is likely that having an unresolved Doha Round hanging over the WTO will inhibit the ability of the organisation to address new and increasingly important issues and challenges in trade policy, could potentially dent its credibility and authority, undermine the workings of its dispute settlement mechanism and detract from its centrality to global trade governance.
- Fourth, there is no certainty that the period from 2013 onwards will be any more conducive to multilateral trade negotiations, especially considering the likelihood of rougher US Congressional Politics and the probability that a new Chinese leadership would be loath to begin its stewardship with major tariff concessions. There is therefore no telling when negotiations would be successfully revived.
- Finally, it has been suggested that such a move would require a down payment of offers that would be conditional on a timely return to the negotiating table. As has been demonstrated with the mooted LDC-plus package, however, agreement on such a down payment is unlikely to prove such a straightforward process.
The third strategy highlighted by observers of the Doha Round would be to simply declare the round a failure and move on. To be sure, no individual member state would be keen to publicly announce the demise of the talks for fear of being blamed for throwing away a significant amount of work and progress, yet declaring the round dead could be just what is needed in order for the WTO to get past the seemingly insurmountable obstacles that the Doha negotiations have thrown up. This strategy could pave the way for a new, more focused round of negotiations that could be designed so as to avoid many of the problems that have beset the Doha Round. In particular, it could contain a series of narrower and more focused (possibly plurilateral) agreements rather than subscribing to the single undertaking principle of previous rounds. It could also use revised negotiating conventions and modalities that would be more conducive to a successful conclusion of negotiations. Finally it would allow the WTO to adopt an agenda incorporating some of the newer trade-related issues, such as food security, that have become increasingly important.
Declaring Doha dead would, however, be somewhat risky. For instance, is not clear that member states would be willing to invest resources in a new more focused round, or whether such a round would have any greater chance of success, especially as many members view the current issues being grappled with in the Doha Round as their top priorities in multilateral trade negotiations. The long run consequences of such a move would also be unpredictable, and might include an even greater focus by member states on preferential and regional trade agreements, which could in turn make the prospects of future multilateral agreements even more remote. Similarly, such a move could severely damage the credibility of the WTO as a forum for multilateral negotiations, and could even jeopardise the continued enforcement and respect of WTO rules and processes by member states. For these and other reasons member states are unlikely to support such a strategy.
Given the apparent pitfalls of suspending the Doha Round or declaring it dead, it would appear that member states are likely to attempt to continue to ‘muddle through’ with the negotiations, even if this appears to many to be a case of investing ever more resources into something that seemingly can’t be done. If this is indeed going to be the chosen route for the Doha negotiations, it is important that some of the key obstacles to the success of the round be addressed. These include the combination of rigid tariff-cutting formulas and self-selecting flexibilities, which have resulted in a situation where the ‘sacrifices’ being asked of member states are far more visible than any potential gains, and the system of classing states as developed, developing and least-developed countries, which, by lumping the likes of India and China in with that of Namibia and Botswana, does not adequately reflect the realities of the global political economy. Addressing these and other issues, such as the hold domestic special interest groups have over certain members, is likely to be the only way that any meaningful progress in the negotiations will be forthcoming.
Sources:
WTO ( http://www.wto.org/english/news_e/news11_e/tnc_infstat_26jul11_e.htm)
ICTSD ( http://ictsd.org/i/news/bridgesweekly/111353/)
Matthews, A. 2011. Life after the Doha Round, available [online] at: ( http://capreform.eu/life-after-the-doha-round/)
Schwab, S. C. 2011. Acknowledge Doha’s demise and move on to save the WTO, available [online] at: (http://www.voxeu.org/index.php?q=node/6584)