Global Trends by Martin Khor
Monday 5 April 2010
Long stalemate ahead for WTO talks
A recent “stocktaking 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 forseeable future.
The latest bout of negotiations, a “stocktaking exercise” held in
Geneva in the last week of March, ended with no direction and without
plans for a 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 Programme,
and even informally called the Doha Development Agenda to make it more
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 liberalized are imbalanced. They call on developing countries
(except the LDCs) to undertake more real commitments than developed
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. They want 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
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
to sticking 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
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.
So it is a stalemate. At the “stocktaking” held at the WTO, South Africa’s
Ambassador Faisal Ismail was perhaps the most eloquent in diagnosing
“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 unraveling
over 8 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.
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.”
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 stocktaking exercise ended with no more plans for senior officials
from capitals to meet in Geneva,
as they have been doing, nor 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 checkered 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
With the US
mired in its own domestic problems, it will be a long wait. So long
that the Doha Work Programme, renamed the Doha Round, may unravel or
diminish in the global agenda.
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