Plan-B for saving Doha Development Round doesn't mean ditching WTO's other issues

Last week, Pascal Lamy, the Director General of World Trade Organisation (WTO), put forward a three track proposal, called Plan-B, to push the Doha Development Round (DDR) towards a partial outcome by December this year. The cautious welcome to the proposal from delegates of some of the WTO member countries masks a general apathy of businesses to concluding the DDR negotiations.

Since the launch of DDR in 2001, the trade talks have got mired on a host of technicalities, especially on the extent of subsidies that the rich countries give their farmers. All the member countries require to agree on all the points in a ‘single undertaking’ for the negotiations to conclude. With developing countries and least developed countries (LDC) demanding that imbalances in the earlier agreements be set right up front and developed countries dragging their feet on critical issues, the negotiations had stalled. With little hope of quick agreement on controversial issues, Lamy has tried to get some momentum going with his new proposals.

Essentially, Lamy wants LDC-specific issues such as duty-free and quota-free access for goods produced in LDC in the developed and developing countries’ markets, waiver of certain disciplines relating to agreements on Trade in Services and Rules of Origin and issues relating to ending subsidies for cotton producers in rich countries to be put on a Fast Track and agreed to immediately.  Secondly, he proposes LDC–plus outcomes with a significant development component by December 2011, which he calls the Middle Lane. Contentious issues like agriculture, non-agricultural market access, services, trade remedies and intellectual property can move into a Slow Lane for conclusion after 2011, says his Plan-B.

The proposals come at a time when protectionist pressures are increasing globally. The latest WTO report says that the G-20 (group of 20 developed and developing) countries have introduced more trade barriers, including export restrictions, in the past six months than in previous periods since the financial crisis began, covering 0.6% of total G20 imports which is an increase of 0.3% over the previous six months. Despite the positive forecasts for 2011, the outlook for world trade remains clouded by a number of significant risk factors in addition to the recent natural disasters in Japan. Sovereign debt problems, rising prices for food and other primary commodities, and unrest in major oil exporting countries generate uncertainties for the near future, says the report.

Lamy stressed that producing a partial outcome in December should not mean the remaining issues should be ditched and that the WTO’s routine work remains valuable even without agreement in the Doha Round. He said that he will continue to consult members on the issues, and report back at the next meeting on 9th June. He expected significant progress before the eighth Conference of WTO Trade Ministers due in December this year at Geneva.  

Indian exports have done so well since 2001 that few are able to visualise how a WTO trade deal will help. Also, many bilateral and regional trade agreements are bringing down trade barriers anyway.

The Commerce Ministry has initiated some moves to consult the industry on the possible impact of Plan-B proposals but it needs to communicate to the trade in simpler terms the technicalities and intricacies of various issues at stake so that the industry can make appropriate impact assessment.  

Email: tncr@sify.com