T S Vishwanath: Doha: The last mile

With the talks threatened by protectionist forces and increasing bilateral FTAs, key WTO members have their task cut out

As 2010 was drawing to a close, negotiators in Geneva were getting active to try and conclude the evasive Doha Round in 2011. Director General of the World Trade Organisation (WTO) Pascal Lamy referred for the umpteenth time to the “last window of opportunity” available to the member countries to conclude the development agenda that was agreed at Doha, Qatar in November 2001.

Lamy may not be wrong this time. Missing the opportunity to conclude the WTO Round this year may point to the fact that countries do not consider a multilateral trade liberalisation agreement to be of any help in boosting trade flows. With the global economy getting back on track after the slowdown, it is important for all countries to get together and conclude the Round. India has already voiced its consent to conclude the Doha negotiations at the earliest.

As member countries intensify their efforts this year to wrap up the negotiations, it will be important for all nations to refrain from certain pitfalls that seem obvious in a global environment in which developing and least developed countries, which are supposed to gain the most from the Round, have rebounded the fastest from the slowdown, while developed countries remain sluggish and tentative. With developed countries still working hard to ward off the ills of recession-induced protectionist tendencies and export restrictions growing across the globe, negotiations can go off the track.

Some of the developed members who would play a key role in concluding this Round are the US, the European Union (EU) and Japan. Among developing countries, China, Brazil and India would have to play an equally important role and the least developed countries would have to keep a close watch to ensure that they receive their due from the development Round.

From the US’ perspective, it would be important for the United States Trade Representative (USTR) to ensure that he does not pander to the protectionist tendencies that have grown in the country. Industry in the US seems keen to conclude the Round and it would be important for Washington to stay focused on removing distortions such as those in agricultural subsidies to convince other members of its seriousness to conclude the Round.

The EU has a crucial balancing act to perform. With the eurozone under pressure, it will be important for the 27-nation EU to ensure that it is able to show reasonable success in its demands from developing countries. Also, the fact that some countries have shown better growth than others in the EU may create some problem for EU’s negotiators. However, the EU will have to show leadership if this Round is to be concluded in 2011.

Japanese companies, in the last one year, have shown tremendous desire to invest abroad and tap markets overseas to overcome the recession at home. Tokyo, therefore, will look towards further openings in the industrial goods area from developing countries like India and Brazil and in the emerging countries in Africa. However, it has the problem of being completely defensive in agriculture. For achieving some good results in industrial goods, Japan may have to move forward on its position on services and agriculture.

Developing countries like India, Brazil or China have been very keen to conclude the Round at the earliest and are open to moving forward on position on a reciprocal basis. However, New Delhi should ensure that the development objective of the Round remains intact.

The WTO’s Annual Report states that world trade in 2010 recovered strongly following its worst decline in many decades. The Report forecasts world trade to grow by 13.5 per cent in 2010. The report illustrates that the world economy is still in a recovery phase from the global financial crisis.

The growing number of free trade agreements (FTAs) also poses a threat to the multilateral trade negotiations body. There are 200 regional trade agreements in place and another 100 are under negotiations across the globe. These agreements provide the much needed expansion of markets for countries, taking away the importance of a multilateral agreement.

The Doha Round is at a critical juncture this year. It is threatened by the mushrooming bilateral free trade agreements as also the protectionist tendencies across the globe. To keep the WTO relevant, the member countries need to find acceptable solutions to conclude the Doha Round. At the same time, they should ensure the development agenda is kept intact. There is a lot at stake for the WTO in 2011 and die-hard multilateral trade liberalisation supporters expect it to deliver.

The author is Principal Adviser APJ-SLG Law Offices