DOHA in the air

Mar 29, 2010 Editorial

If there was any doubt that the developed countries invariably stack the decks of the global economic order in their favour and against that of the poorer countries, the fate of the negotiations of WTO’s DOHA round should dispel it completely.

Launched in November 2001, the Doha round of multilateral trade negotiations represented an ambitious attempt to use trade as an instrument of development: hence the term, “development round”. The round, which initially was supposed to be concluded by the end of 2004, has dragged on primarily because of the intransigence of the developed countries. The previous nine rounds had all studiously excluded any meaningful discussions on agriculture – the bedrock of the underdeveloped world. The developed world in the meantime had instituted intricate systems that doled out incredible amounts of subsidies to their farmers, which then placed farmers in developing countries at a severe disadvantage.

The major contentious issues, not surprisingly, involved reforms in agriculture, in trade, linking trade and labour standards (particularly those related to child labour), and finalisation of a Multilateral Agreement on Investment. We can understand the legislation enacted in our own country in these areas in the last decade. It was also during the 1999 Seattle Ministerial Conference that the growing influence of developing countries on the multilateral forum was felt –especially Brazil, Russia, India and China, the so-called BRIC countries. Developed countries came to realise that unlike in the past, developing countries, particularly these bigger ones, could no longer be taken for a ride. Multilateralism was acquiring some teeth.

The Doha Declaration represented a compromise between the positions of developed and developing countries. The former agreed to liberalisation of trade in agriculture and to address special needs of the latter in NAMA and trade in services, but did not define the modalities of the reforms and the timeframe within which the same were to be carried out. In short, whatever commitment developed countries made, was couched in vague, non-committal terms. It was still an uneven street.

The Doha Declaration provided for negotiations aimed at substantial improvements in three areas related to trade in agriculture: market access; export subsidies and trade-distorting domestic support. However, it was felt that the offers of reductions of tariffs by the developed countries were merely symbolic in light of the vast reductions that had already been instituted and so were not reciprocal to the sacrifices demanded of the developing countries.

At Geneva in 2008, the major protagonists were India and the US. India directed several alliances of developing countries such as G-20, G-33 and Non-Agricultural Market Access (NAMA) to ensure that the “development dimensions” of the Doha Round were safeguarded. On the other hand, the US, the European Union and other developed countries mounted pressure on the ‘large and developing economies’ like India, China, Brazil and South Africa to throw open their markets globally for both agricultural and industrial goods. India and China’s refusal to blink will redound to the developed worlds benefit very shortly.

That made it the third time the talks at the Ministerial level had collapsed. It was resuscitated however, when the economies of the developed countries imploded and they feared that protectionism might be deployed in the developing world to protect their economies. Not surprisingly however, it was the developed countries that jumped on the protectionism bandwagon even as they lectured the rest of the world on its dangers.

In its November 2008 G-20 Washington Summit, the major nations set a year as the deadline for reaching agreement “on modalities that leads to a successful conclusion to the WTO’s Doha Development Agenda”. But by April the following year, this commitment has degenerated to the desultory, “We remain committed to reaching an ambitious and balanced conclusion to the Doha Development Round, which is urgently needed.” And stagnation has remained the watchword ever since.

2010 is a make or break year for the DOHA round and equitable world trade – and more specifically for smaller countries like ours against which the terms of world trade are so heavily stacked.

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DOHA in the air

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DOHA in the air

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