TWN Info Service on WTO and Trade Issues (May10/11)
27 May 2010
Third World Network

India, China, Brazil leadership key to Doha success or failure, says US
Published in SUNS #6922 dated 11 May 2010

Geneva, 10 May (Kanaga Raja) -- The success or failure of the Doha Round depends on whether advanced developing economies such as India, China and Brazil are ready to accept the responsibility and leadership that goes along with their new position in the global economy, the new US Ambassador to the World Trade Organization (WTO) suggested Monday.

In his first media briefing here since assuming the post of US Permanent Representative to the WTO, Mr Michael Punke, who is also Deputy US Trade Representative, said that there is need to improve the level of ambition and balance in the Doha Round.

Speaking separately to SUNS later, Ambassador Ujal Singh Bhatia of India stressed that "the success or failure of the Doha Round will depend on whether we are able to effectively meet the Development mandate."

Asked about the US call for leadership from India, Brazil and China, another developing-country trade diplomat told SUNS that when it comes to the question of leadership, it is the United States that has to take the leadership.

According to the trade diplomat, the United States has to understand that the Doha negotiations is not a zero-sum game, but a give-and-take. Those that are more powerful, especially the developed economies, have to lead by making concessions that delivers on long-overdue development, on which the Doha talks were premised upon.

Other trade observers noted that the "Doha Development Agenda" was all about the leading industrial economies delivering on their promises of long-term reform of their agricultural sector, and the other commitments they undertook at Marrakesh in 1994 and for which they had extracted advance payments from developing countries including Brazil and India, and from China at the time of its accession.

Unable to show leadership and implement their commitments at Marrakesh, and reiterated at Doha, the United States (which in addition has no Congressional support for the trade policy), the EU and other industrialised economies are now trying to mislead public opinion by asking Brazil, China and India "to show leadership and responsibility".

In his opening remarks at the breakfast briefing Monday morning, Ambassador Punke said that he is here with the support of the US government to negotiate a Doha Round outcome that is "balanced and ambitious".

"We are on a more productive path in Geneva, post-stocktaking (on the Doha Round, held from 22-26 March) than perhaps we've been on before," he said, adding that it is significant to him what the Doha stocktaking exercise did not conclude -- "there was no call for a new arbitrary deadline" and "there was no call for a manufactured event, some 'big bang' effort to revive the Doha Round."

Those are the types of approaches that have not been successful in the past and what the WTO Membership embraced instead is the notion that there has to be a lot of hard work in multiple configurations. In this context, he pointed to the discussions on the need for multilateral, plurilateral and bilateral interactions, saying that the US will be eager to participate in all of those types of interactions.

The common denominator in all of these interactions is that there has to be negotiations, he said further, adding: "I need counterparts that are ready and empowered to negotiate. And I particularly need those counterparts in the context of our bilateral discussions with India, and China and Brazil."

At the end of the day, the success or failure of the Doha Round comes down to a very simple question -- "are advanced developing economies like India, China and Brazil ready to accept the responsibility and the leadership that goes along with their new position in the global economy," he asked.

"If they are ready to accept that responsibility and leadership, we will have a successful outcome to the Round. If they are not ready to accept that leadership and responsibility, we won't have a successful outcome...," said Ambassador Punke.

Responding to questions, Punke said "what is critical right now is that we improve the ambition and the balance of the Round." What is key right now "is figuring out how we improve the ambition level and improve the balance."

Asked what specific commitments were needed from India, China and Brazil, he said one of the refrains that he finds "irritating" is the notion that the US' counterparts don't know what the US wants.

He said that the US has been extremely clear in outlining the key areas of interest in terms of its bilateral discussions and more broadly. In NAMA (non-agricultural market access), the US is focused on priority sectors that it has been talking about for years, for example, areas such as chemicals, electrical equipment, and forest products.

In agriculture, the US is looking to ensure that the flexibilities that have been discussed do not create enormous loopholes that end up undermining the potential market access that might otherwise be achieved. In areas such as the special safeguard mechanism, the US is working very hard to ensure that "we do not go backwards and create a situation where it's actually possible to go back on commitments that were made in the Uruguay Round."

In the area of services, Punke said that the US is extremely focused on making sure that "the advanced developing economies are not free-riders in terms of global services trade." He pointed to services sectors such as computer services and express delivery where the US has been focused.

"In all of these areas, the mystery is not what the US wants, but I think the real question is whether or not we have counterparts with which we can engage in serious negotiations. And to me, that's the open question today."

In response to another question, he said that he has been "frustrated" with some of the characterizations of the US position in the press recently in terms of the issue of "is the US willing to pay more for the Round," adding: "And frankly, I think that that represents a real mis-characterization of where we are at. The starting point in our discussion is that the Round, as it stands now, is not sufficiently balanced. The only way to improve that balance in the Round is to engage in negotiations."

What the US is trying to do in a very specific and targeted way is to focus on key sectors and priority markets. "Obviously for us and for everyone, those markets that will be most significant, as we look out over the next 20 years, are going to be the advanced developing economies, certainly including India, China and Brazil."

The US envoy said that it is "ironic" to him to talk about a starting point of additional US concessions, "when it's our premise that the Round is currently imbalanced and that balance has to be improved."

He claimed that two-thirds of the tariffs that are collected by advanced developing economies are paid by other developing economies.

In response to a question, he expressed hope that countries like India, China and Brazil will recognize the leadership obligations, the responsibility that they have to the global economy and will be willing to step up and exercise that leadership.

Asked to define "development" in the context of the Doha Development Round, Punke said that there is need to get beyond "this notion of the monolithic developing world." He was of the view that it is not accurate to think of China as being the same as Chad and that it is not accurate to think of Brazil as being the same as Bolivia.

One of the key development objectives of the Doha Round is "increasing access to the advanced developing economies from the simple standpoint that those are the economies that are likely to grow the most over the next 20 years, and also from the standpoint that those are economies where some of the most significant barriers still remain."

He was of the view that in the US and Europe, because of trade preference programmes, the exports of many of the poorest countries already enter those markets fairly freely. From that standpoint, the focus has to be on the advanced developing economies.

In response to another question, he said that the situation after July 2008 was one of deadlock. The US has been very clear from July 2008 onward that there needs to be a higher level of ambition and a higher level of balance in the Round.

"And I think the creative approach that we have taken to create that higher ambition and greater balance is to focus on those key sectors in those key markets that are of the highest importance to us. And from that standpoint, our focus has been on bilateral engagement, because we think that's the most focused way to address our priorities."

"We're there, we're ready to talk, and we're certainly hopeful that India, China and Brazil and the other advanced developing countries will step up to the leadership responsibility that's incumbent upon their side."

Asked whether the US still does not accept the 2008 texts as a basis for further negotiations, Punke claimed that there was no agreement in July 2008 and said that India and China, for example, expressly walked away from what was on the table in July 2008.

"... I don't think that it is useful to pretend that July 2008 was something more than what it was. Specifically, I don't think it's useful to pretend that July 2008 was representative of agreement. It was not an agreement. In fact, the US was very clear at the time in saying that more was required in the way of sectoral agreements on the NAMA (non-agricultural market access) side, more was required in the way of services, which frankly, has barely been touched at this juncture," he said.

In response to another question, he acknowledged that there are significant gaps and "I don't think any of us should try and sugar-coat that. What I believe is that if we're going to overcome those gaps, that it has to involve real negotiations..." +