Long stalemate ahead for WTO talks
Martin Khor
A recent “stock-taking exercise” at
the World Trade Organisation ended in despondency with the prospect that
the current stalemate in the Doha Round will continue indefinitely as
the world waits for the United States to clarify its intentions.
The World Trade Organisation’s Doha Round appears to be stuck in a
strategic deadlock, with no end in sight, and little hope for completion
in the foreseeable future.
stock-taking exercise |
The latest bout of negotiations, a “stock-taking exercise” held in
Geneva in the last week of March, ended with no direction and without
plans for further meetings of senior officials from capitals, or for
trade ministers. The target of finishing the Round by the end of this
year was not even mentioned. It has been given up.
The Doha Round started in November 2001 at the WTO’s ministerial
meeting. At that time the developing countries were strongly against a
new Round, arguing that they had not even begun to digest the Uruguay
Round and its many problems.
So the new negotiations were officially termed the Doha Work Program,
and even informally called the Doha Development Agenda to make it more
palatable.
In the nine years since, the development content of the talks has
almost entirely disappeared, and the developed countries’ real
intentions - to open up the markets of developing countries while
protecting their own turf especially in agriculture and in labour
services - have come to the fore.
The latest drafts texts on how agricultural and industrial imports
are to be liberalised are imbalanced. They call on developing countries
(except the least developed ones) to undertake more real commitments
than developed countries.
In particular, the developed countries can still make use of their
huge agricultural subsidies which enable the United States’ and Europe’s
otherwise inefficient farms and companies to capture markets, including
displacing the small farms of developing countries.
But developing countries are asked to cut tariffs of their
manufactured goods drastically (for some countries by up to 60%) so that
most of their new import duties will be below 13%. Many economists worry
that this will damage the countries’ industrial development prospects as
the local firms cannot withstand the competition.
Despite the advantage given by the drafts, the United States is still
asking for more. It wants some developing countries (China, India and
Brazil in particular) to also agree to cut their tariffs on some
industries (chemicals, industrial machinery and electronics) to zero.
A senior Chinese official said that China had already made major
concessions in the draft texts, and these extra US demands are simply
unacceptable, as they would damage or wipe out the most important
industries in the countries concerned.
US-based analysts meanwhile note that the US administration faces a
Congress and a public that is hostile to the US agreeing to stick to its
own minimal commitments on reducing its maximum level of agricultural
subsidies and industrial tariffs. Thus the US is going beyond the draft
texts and making even more demands to selected developing countries to
open their markets.
The developing countries are calling “Foul” as this goes far beyond
the agreed mandate. The US stubbornly sticks to its unreasonable
demands, pointing to what its Congress wants. The developing countries
counter-argue that they too have their own public to think about, and
they won’t accept the destruction of their farms and industries.
US dollars |
So it is a stalemate. At the “stock-taking” held at the WTO, South
Africa’s Ambassador Faisal Ismail was perhaps the most eloquent in
diagnosing the stalemate.
“We find it disconcerting that the US remains the most significant
major player in the Doha Round that is unwilling to work on the basis of
these multilateral texts. Its major constituencies and business lobbies
are demanding more market access commitments from its trading partners,
particularly from the major emerging markets,” he said. “This is the
main reason for the current impasse in the Doha Round.”
Ambassador Faisal quoted Albert Einstein, that doing the same thing
over and over again and expecting different results was “madness” and
warned that continuing with “business as usual” will risk unravelling
over eight years of work. He proposed that the major players stop their
mercantilist approach, and adhere to the principles of fairness,
sticking to the development mandate of the Round and to agreements
already made, and recognise the value of a stable multilateral trade
system.
Brazil, on behalf of the G20 of developing countries, said the drafts
embody a delicate balance that must be respected; otherwise we will need
readjustments of the entire package. “Such readjustments cannot entail
additional unilateral concessions from developing countries.”
India said: “There is nothing to suggest that the political
constraints that have impeded our progress over the last six months will
suddenly disappear.”
It urged members to continue with the talks but warned that their
purpose “cannot be to meet the unrealistic demands of one or more
members for new or additional market access, but to come to a balanced
outcome in line with the development mandate” and added that “a few
developing countries cannot be the bankers of the Round.”
The WTO Director General Pascal Lamy said the negotiations would
continue with the Chairs leading the process at the WTO. He would also
hold meetings. And countries would also hold their own meetings in small
groups or bilaterally.
The stock-taking exercise ended with no more plans for senior
officials from capitals to meet in Geneva, as they have been doing, or
for any small Ministerial meetings at the WTO. The target set by the G20
Summits, to conclude the Round this year, is dead.
As has often been the case in the chequered history of the Doha
talks, the rest of the world is still “waiting for the United States”.
Previously the wait was for the US to agree to make some commitments to
liberalise its agriculture. Now the wait is for the US to give up its
unreasonable demands on others.
With the US mired in its own domestic problems, it will be a long
wait. So long that the Doha Work Program, renamed the Doha Round, may
unravel or diminish in the global agenda.
-Third World Network Features |