Events & Issues

New Delhi, 3 July 2008

Doha Negotiations

TIME FOR POLITICAL WILL

By Dr PK Vasudeva

The Doha Round of the World Trade Organisation (WTO) now is in its seventh year. It has entered a crucial phase in the past few months. Senior officials are expected to start trade-offs in the coming weeks in the core areas of agriculture and non agricultural market access (NAMA)-- industrial goods, to pave the way for ministers to take big political decisions for an outline deal, possibly this month or next.

The WTO agriculture negotiations were resumed this May 26th, on the latest revised draft “modalities”. In this meeting of the full membership, the talks’ chairperson, Ambassador Crawford Falconer of New Zealand, said that the agriculture negotiations at the WTO will continue as delegates try to narrow differences ahead of a possible meeting of ministers in July.

A small group of major food exporters and members of the G-33 group of developing countries, known as the "Walk in the Woods" Group, was also formed to explore differences over special treatment for poor countries' farm imports.

In fact, the WTO members want to wrap up the overall deal this year to avoid the talks getting caught in the change of the U.S. administration and new European Union Commission in 2009. Soaring food prices that have created unrest and hunger in developing countries and which are blamed on distortions in the world trading system have added further urgency to the talks.

Commerce Minister Kamal Nath has warned the EU and the US not to extract "a large chunk of market access in industrial goods from developing countries" in the Doha negotiations, and thereby, upset the overall balance in the Round.

At a closed-door round table of only trade ministers at the Organization for Economic Cooperation and Development (OECD) annual meeting, Nath said unambiguously that the industrialised countries seem determined to upset the balance in the Doha trade talks by offering too little in the market access for agriculture, while pressing India and other developing countries to offer substantially huge commitments in NAMA.

In sharp contrast, the trade chiefs of the US and the EU said the NAMA package will hold the key to the success or failure of the Doha negotiations. The US trade representative Ambassador Susan Schwab said emerging countries like Brazil, India, Argentina and South Africa will have to show greater flexibility in providing market access for industrial goods.

In response, India, Argentina, and South Africa said substance must drive the process and not artificial deadlines to achieve results. The EU and the US want a ministerial meeting soon, at least by the end of this month, while developing countries feel there is not enough progress to warrant such a meeting.

The WTO Director-General, Pascal Lamy, insisted during the round-table that modalities in Doha agriculture and market-opening for industrial goods will be wrapped-up "before France takes over the presidency of the EU.”

In the recent farm talks, Australia for the Cairns group of food exporters and India and Brazil for the G-20 group of developing countries both criticised the new $289 billion U.S. Farm Bill for pushing up subsidies when the talks aim to cut support. New proposals from mediators two weeks ago, based on the past nine months' negotiations, are intended to serve as the blueprint for the meeting of ministers.

At a meeting of WTO members in June, the Chair of the Negotiating Group on NAMA, Don Stephenson, said that after a week of consultations with no progress he was suspending the meetings of the Group until members achieve some convergence.

On NAMA, India’s reservation stems from differentiated duty cuts proposed in Stephenson’s draft. It offered developing countries to choose to reduce tariffs to a maximum of 19 to 26 per cent, a wider range than earlier proposals this February. But this overall range is composed of three distinct bands of percentage (19-21, 21-23, and 23-26) which have their own implications for any exemptions.

The 152 governments in the WTO are trying to conclude global trade talks that began in November 2001 in Doha, Qatar, within the next two months. A key obstacle to an accord is concern in rich countries that opening their farm markets to developing nations will not be rewarded by better access for their industrial goods to emerging markets.

The immediate response of the main players has been one of criticism, with the US, in particular, challenging the “largest and fastest growing economies” (read India, China, Brazil, among others) to increase the level of “liberalisation”. Not surprisingly, New Delhi has given notice that it is going to oppose, as previously, certain stipulations in the two drafts, specially the “effort” being made by the industrialised countries to divide the developing-countries bloc.

Speaking to the media from Auckland, Kamal Nath pointed out that the Doha Round was an opportunity to altogether eliminate Overall Trade Distorting Domestic Support (OTDS). “Instead, all of us at the Hong Kong Ministerial settled for steep and effective cuts in OTDS. Even this goal now seems to be vanishing”.

The Minister said that for the US, the lowest number in the text ($13 billion) was nearly double the current applied levels of domestic support. “Where is the need for 100 per cent headroom as a cushion?” he quipped.

Another major area of concern in agriculture was the issue of Special Safeguard Mechanism (SSM). “The draft proposals on SSM, including the absurdly low number of products for which the SSM could be invoked during a year, the threshold levels for the price and volume triggers and the cross-check between the two independent triggers, are even more stringent than proposals for the Special Safeguards, which are going to be used primarily by developed countries,” Nath elaborated.  

At an informal meeting of the Trade Negotiations Committee on June 27 Pascal Lamy urged “maximum effort from everyone over the next weeks” to ensure a productive meeting of a number of ministers scheduled for the week of 21 July. He said the immediate challenge is to make progress that “will provide a basis for improved texts in Agriculture and NAMA”.

“So, the immediate challenge in the next meeting is to make the sort of progress on key issues which will provide a basis for improved texts in Agriculture and NAMA. Once we have achieved that goal, we will need to prepare for the ministerial discussion so it can be productive. This means maximum effort from everyone over the next few weeks, not just to put in the hours, but to make the movement we need. I am confident that the WTO and its Members will rise to this challenge”, he said.

As has been clear for some years, the Doha Round can be effectively concluded only if there is the political will to do so. The drafts are technical documents that can go up to a point and no further, from where the politicians must take over. The problem is that the politicians are not playing ball, especially those who are still hesitating to acknowledge the fact that the world economic order has changed, with yesterday’s underdogs having already moved into the co-pilot’s seat.—INFA

(Copyright, India News and Feature Alliance)