D Ravi Kanth: Back to the future

We can’t solve problems by using the same kind of thinking we used when we created them,” would be a timely reminder for 40-odd trade ministers when they meet in New Delhi this week. Ostensibly, they would address the issue of how to ‘re-energise’ the comatose-Doha Development Agenda (DDA) round of trade negotiations. This will be a Herculean task given the numerous failures in the Doha talks over the last eight years.

At a recent informal general council meeting, the Indian trade envoy wondered whether there is any energy left in the Doha negotiations, a comment that revealed the creeping ennui in the World Trade Organisation. It remains adrift and rudderless while its head is isolated from its members as well as his staff on the Doha negotiating platform. His preference to deal with the trade ministers, directly bypassing the negotiators in Geneva, has caused a crisis of confidence. Ironically, he starts his second term today and one only hopes that he draws appropriate lessons.

It is rather harmful to assume that there are only few issues to be addressed and that members are in the endgame. Besides, it is a travesty to assume that if the concerns of some major players are resolved, everything else will fall in place. And that is what the irrepressible trade minister from Australia chose to do. He handed over a list of controversial ideas to his Indian counterpart to be addressed at the New Delhi meeting. They include a set of defensive issues such as the Special Safeguard Mechanism for developing countries to ward off unforeseen import surges in agricultural products; the right to self-designate super special products where no import duty cuts will be made; and compulsory participation of China, India, Brazil, and South Africa among others in what is called zero-for-zero tariff elimination in chemicals, industrial engineering, electricals and electronics among others.

In one stroke, Australian minister Simon Crean put all defensive concerns of many developing countries, especially India ‘up for grabs’. Strangely, there is no mention of the bigger developmental issues like addressing the global trade-distorting farm subsidies or other bread-and-butter issues of the poorest countries. It is an open secret that Crean wants WTO members to pander to the trade concerns of the world’s sole superpower, which is not in a position to come to the negotiating table today due to mounting opposition to the Doha Round. Further, there is no limit to which countries will have to ‘pay’ to the US if they have to satisfy the powerful domestic constituencies in Washington.

The main problem with Doha, an American trade policy expert told Business Standard, is that it was launched on ‘false pretenses’ without any underlying political consensus, at least in Washington, as to its desirability or its objectives. The two creators of the Doha Round — Pascal Lamy as the former European Union trade commissioner and now the WTO chief and his best friend Robert B Zoellick, who was the US Trade Representative — worked tirelessly to launch the Round without any business or political support as was the case in the previous rounds of trade liberalisation talks, he said.

Consequently, there is little support for Doha, whether in the capitals of Washington or elsewhere. Further, these two worthies made expedient and opportunistic promises during different phases of negotiations by agreeing to an untested negotiating model based on modalities. And this has become a nightmare for subsequent US trade chiefs after Zoellick to agree to. They have had to deal with raised expectations of the Round which domestic constituencies in Washington are not ready to accept at this point.

Against this backdrop, India did the right thing by raising questions on how the talks were to be concluded, given a host of unresolved issues, not just in Agriculture and Non-Agricultural Market Access (NAMA), but also in Services, TRIPS, Rules and other areas.