T S Vishwanath: How to salvage Doha

Improving LDCs' market access, addressing developing countries' concerns would help

The Doha round of the World Trade Organisation (WTO) is at the crossroads again with WTO Director General Pascal Lamy making a fervent appeal to member countries seeking their support to “identify and converge upon a way forward which preserves the objectives and values of the Doha mandate.”

Lamy made this appeal while releasing a set of documents that represent the work undertaken by negotiators over the last ten years. These documents are expected to help countries understand the political differences that exist in various areas of the Doha agenda so that they can collaborate with each other to bridge the differences.

What is significant in Lamy’s statement is the specific reference to the negotiations on industrial goods. What is equally striking is the fact that there is a separate note on sectoral negotiations on industrial goods. The reference is surprising because sectoral negotiations were brought into the agenda at a much later date and developing countries, including India, Brazil and China have not been in favour of a deal on tariff reduction in industrial goods with a sectoral focus. Even as the documents cover most crucial aspects of the negotiations, the emphasis, as in the earlier rounds of the negotiations, seems to be moving towards a deal in the area of industrial goods.

The director general seems to have missed out on elaborating the differences in two important areas of negotiations in his message, namely services and agriculture, on which there have been political differences impeding the move towards a balanced outcome in the Doha negotiations.

It is difficult to disagree with Lamy when he appeals to governments to think hard about the consequences of throwing away “10 years of solid multilateral work” if adequate support is not built by countries for trade opening.

Countries will meet in the coming days to look at how the Doha round can be saved. The last few weeks have seen several online discussion forums looking at whether the Doha round is still relevant for countries. Interestingly, many analysts are of the view that the Doha round has lost its relevance today. Even if this may not be true, it remains to be seen whether countries will be able to rise above their domestic concerns and look at how a global deal can help build a stronger economic environment across the world, which will be a win-win situation for all countries.

To achieve this objective, Lamy and the member countries of the WTO need to look at the core issues that ail the Doha round. The issue is not about the lack of momentum on sectoral negotiation in the WTO, as pointed out by the director general, but about not being able to close the negotiations on such issues as cotton, which are important for some least developed countries (LDCs), as also on some important issues related to agriculture or services, which are important for developing countries. The director general talks about a bottom-up approach to negotiations. The approach has to be directed towards completing the development aspects of the round before moving on to market access issues.

Lamy rightly says he still senses an “overall commitment to the aims of the round” — which is hopefully a reference to making this a development round. He also points out that to find a way forward “it cannot be business as usual.” The answer as he again states “cannot simply be to stop and reboot.”

Given this backdrop, the strategy to close this round has to be three-pronged. First, move towards a development-oriented approach where the LDCs are first provided with an opportunity to improve their access to global markets. Second, address some core outstanding issues related to development objectives that are important to developing countries. And finally, steer clear of issues that were placed on the table in the middle of the talks, like the sectoral negotiations in industrial goods.

A lot is at stake for most countries in concluding the Doha round at the earliest. Given the economic turmoil in many developed countries it is equally important for them to work towards an early conclusion of the Doha negotiations. Completing the round in 2011 seems difficult but with some strong push it may move forward in the next six months to hopefully conclude next year.

(The author is Principal Adviser APJ-SLG Law Offices)