D Ravi Kanth: Doha drifts again

We sail within a vast sphere, ever drifting in uncertainty, driven from end to end,” is what the G20 leaders conveyed to their trade negotiators at the Pittsburgh summit last Friday. Like the previous two summits in Washington and London respectively, the latest event under the leadership of President Barak Obama failed to provide any clear direction on how to end the comatose Doha Development Agenda trade negotiations.

It might have been a success in other areas such as the decision to replace the G8 by the G20 in which developing countries will be given a seat on the high table. But on trade and Doha, the leaders have progressively downgraded the importance attached to the Doha project that began in 2001. In Washington last year, the G20 leaders had said they “shall strive to reach agreement this year (end-2008) on modalities that leads to a successful conclusion to the WTO’s Doha Development Agenda with an ambitious and balanced outcome.” They instructed their trade ministers “to achieve this objective” and glibly stated that they would “stand ready to assist directly, as necessary”. This goal was not accomplished because of the greedy demands of one member.

When the leaders met again in April this year in London, they vowed to reach “an ambitious and balanced conclusion to the Doha Development Round, which is urgently needed.” Without any factual basis, they said that the Doha Round “could boost the global economy by at least $150 billion per annum.” And now in Pittsburgh, the Doha drift is made much more pronounced with no clear direction on how the negotiations will be wrapped up given the ambiguities in the final statement. Though they reiterated their commitment “to seek an ambitious and balanced conclusion” in 2010, the final blueprint is riddled with imponderables.

One, the summit didn’t set a clear time frame for wrapping up the modalities in the Doha talks on agriculture and market opening for industrial goods. It was agreed at the Hong Kong Ministerial Meeting in 2005 that members will establish modalities first before embarking on other areas as part of a sequential agenda. Thanks to the US and its sole superpower status, this requirement has now been given a royal burial.

Two, there is now no certainty that the draft texts prepared by the chairs for agriculture and industrial goods in December 2008 will continue to be the basis for closing the remaining gaps. It is an open secret that the US never considered the two drafts as agreed among members. That is what the US Trade Representative Ambassador Ron Kirk told Business Standard early this month in New Delhi. Though a large majority of countries, including India, treat these two texts as the basis of the final round of negotiations, the US is all set to reopen these texts.

Three, the statement creates sufficient ambiguity on how to interpret “the need for countries to directly engage with each other, within the WTO bearing in mind the centrality of the multilateral process, in order to evaluate and close the remaining gaps.” The US is bound to insist on focused bilateral negotiations with a major emerging country such as China. But the Middle Kingdom is also well within its rights to refuse bilateral negotiations on the grounds that the Doha is based on a multilateral negotiating framework. Finally, by staggering work in all areas — agriculture, non-agricultural market access, as well as services, rules, trade facilitation and all other remaining issues — it sets the stage for endless interpretational-disputes on what would come first as each member country has its priority areas.

All in all, the US administration has nearly succeeded in hijacking the Doha agenda from an early conclusion because of its changing domestic priorities in which trade figures low. With elections next year in Brazil and reluctance on the part of Beijing to accept new rules that are being dictated by Washington in the Doha trade talks, India should realise that it would not serve any purpose to show its cards when the Doha is on an interminable drift.