Articles > Doha Round at crossroads
Doha Round at crossroads
The Economic Times, April 16, 2010 & The News, Pakistan,
March 28, 2010
Pradeep S Mehta
"The Doha Round is not an island in a sea of
alternative opportunities -- failure on Doha would spill over into
other present and future cooperation efforts, and not only in the
trade policy domain. In our joined-up world, countries simply cannot
go their own way and disregard the costs of neglecting international
cooperation," remarked the WTO Director General, Pascal Lamy in a
recent meeting in San Jose, Costa Rica. The imperative of concluding
the Doha Round could not have been captured better.
2010 is a make or break year for the Doha Round.
The initial euphoria of many members was dampened as far back as
August 2003 when the US and the EU brought forward a small package
on agriculture to take to Cancun. It has further waned since the
Hong Kong Ministerial Conference in 2005 and the stalemate after the
July 2008 package. Countries need to put in significant political
capital to conclude it even if the gains at the end are modest. The
negotiations have clearly waned in ambition since the Hong Kong
meeting and are still in 'intensive care', being watched carefully
and with great anxiety.
However, despite the anxiety of nations about the
sustainability of negotiations, some significant technical work has
been accomplished in the last few years. 'Geographical indications'
is an example on which there has been forward movement. In the area
of non-tariff barriers, which will be the major agenda in the
future, there is a good hope of progress with the Chairman of the
Negotiating Group on Market Access for industrial goods, identifying
several common (or horizontal) issues across proposals regarding
non-tariff barriers on the table.
In the same vein, scheduling of agricultural
tariffs is progressing while even on the extremely contentious
issues of 'cotton' and special safeguard mechanisms in agriculture
there are forward movements. A similar story of dynamism emerges in
the matter of service sector negotiations.
Such progress on technical issues could not have
been possible without the investment of significant political
capital by nations and the leveraging of collaborative synergies.
This spirit of cooperation has again been captured well by Lamy
through his remarks on the occasion of the Trade Negotiations
Committee meeting on March 22, 2010: "We will be able to send a
strong signal to the outside world and focus the political energy
that is needed to move the Round into the concluding phase."
The moot question is why countries have not been
able to utilise this readiness to invest political capital to
conclude the Doha Round and take the world economy to higher levels
of well-being and productivity. Prima facie it may appear puzzling
as studies have revealed that the overall expected gains from the
Doha Round will result in a much bigger stimulus package than all
bailout packages taken together. This is strongly contested, but
everyone agrees that the failure can be harmful.
The answer to this puzzle lies in the greed of
nations overriding the option of bringing about a win-win situation
with modest gains. The Doha Round if concluded would produce a
miniscule increase in exports, far short of the US administration's
target of doubling exports over the next five years. Instead of the
Doha Round, the US administration has signalled its intentions to
follow a weak dollar policy to meet its targets. Other countries
trying to recover from the financial crisis and its recessionary
effects have resorted to protectionism to rule out the import of
adverse influences from the rest of the world.
Protectionism is clearly not the cure for
recession; rather it can trigger the collapse of economic recovery
that many countries (including some rich countries) have started
experiencing since the last quarter of 2009. Moreover, such
protectionism by developed countries will spell ruin for the poorest
countries of the world in Sub Saharan Africa by denying them the use
of trade as an engine of growth at a crucial juncture in their
Multilateralism clearly has to prevail over knee
jerk protectionism if the world has to achieve sustained economic
progress and not get tied up in knots. The conclusion of the Doha
Round thus marks the end of a new beginning instead of the beginning
of the end. We cannot wait forever to conclude the Doha Round as
otherwise other more contentious and unresolved trade-related issues
will continue to produce negative energy.
Positive developments are afoot in all major
capitals except Washington where Obama has unfortunately but
temporarily exhausted his finite political capital in successfully
pushing through a historic initiative on healthcare reforms.
However, Obama's tenacity signals good times for multilateralism.
Having achieved a major victory in the domestic reform arena, the
time has come for him to marshal his political capital for the
facilitation of a major triumph in the multilateral arena by
convincing his domestic constituency of the imperative of concluding
the Doha Round. Such conclusion alone would provide the window of
opportunity and create the necessary goodwill to address domestic
concerns on other trade-related issues.
The conclusion of the Doha Round in 2010 is
imperative for success on many fronts -- global welfare reaching a
new high through better exploitation of comparative advantages of
countries and the reversal of decline in faith in trade as an engine
of growth. The collaborative spirit needed for its conclusion has
been displayed by WTO members in the past while addressing the
development concerns of medicine patents and public health linkages.
Finally, the conclusion of the Doha Round is
essential as it will herald a new era of multilateralism which might
see the appreciation of new linkages -- between trade and finance;
trade and climate change etc. Lamy was right -- the Doha Round is
not an island in a sea of alternative opportunities; rather it is
the channel which has to be negotiated and crossed if a more
prosperous and better aligned world is to be reached.
author is the Secretary General of CUTS International and can be
email@example.com. Bipul Chatterji of CUTS contributed to this article
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