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Preventing failure of Doha Development Agenda
By Pradeep S Mehta |
August 2, 2011, Tuesday
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ONE of the critical issues in the international trading system is the Aid for Trade program. This aid program aims to enable poor countries to access gains from trade liberalization through financial and technical assistance as a stand-alone program, without mixing it with other aid programs.
The third review conference on Aid for Trade was organized at Geneva on July 18. The event was impressive and attended by a large number of countries, intergovernmental and non-governmental organizations.
It came about thanks to the enthusiasm, vision and determination of Pascal Lamy, head of the World Trade Organization.
The meeting was addressed by the heads of the international lending institutions, the UN Development Program, (UNDP), the Organization for Economic Cooperation and Development (OECD) and a large number of ministers and diplomats.
What was sadly not mentioned in the big meeting was that the Doha Development Agenda (DDA) by itself is the best way forward to assist the poor to trade their way out of poverty. After all, the DDA was designed to deliver development gains to all developing countries by addressing the imbalances in the Uruguay Round Agreements. Alas, the DDA calculus continues to boggle minds about its non-progress, but one never knows what lies in the future.
Bob Zoellick, the head of the World Bank and former US chief trade negotiator, who launched the DDA in 2001, launched a broadside against the US government for "dumbing down" the ongoing and largely stalled Doha round of world trade talks. In his remarks at the opening session, Zoellick said, "The whole discussion has become very defeatist. I draw out the US, because the US should still be world leader."
Zoellick did not even spare his former boss, George W. Bush, for the impasse and did not wish to appear that he was blaming Obama alone. He also criticized certain emerging economies for being a part of the problem. As expected, the US reacted against the "dumbing down" criticism and as always shifted the blame to big developing countries like China and India for not doing enough.
Former Indian Ambassador to the WTO, Ujal Singh Bhatia, in an electronic debate on the CUTS (Consumer Unity and Trust Society) Trade Forum, reminded us that the Doha mandate provides for special treatment to developing countries, and less than full reciprocity for developing countries. "If the US and others who played a strong role in designing the Doha mandate had reservations about the status of developing countries, they should have said so at that time. You do not change the rules when the game is coming to a close," Bhatia said.
Be that as it may, the fireworks at the Aid for Trade event in Geneva has raised the ante on the DDA again. In my article on this page on May 19 on a Plan B for Doha ("Time is ripe to close the Doha trade deal"), I had raised several important points, but let me revisit just two of them to envision if Plan A can be resurrected.
Firstly, one does not know what Plan B would entail. Secondly, to address the demands of the US, I had argued that for India it defies economic logic to maintain bound rates four to five times higher than the average applied rates for some farm goods. The international community have been discussing Plan A for 10 years, and are now descending to a lighter Plan B, and one does not know even if that will be a smooth road.
Imagine the huge cost of the decade-long talks. And some have started linking the failure of the Doha Development Agenda talks as something that will affect the WTO itself. This is a highly mistaken notion.
The main reason behind the non-progress of the Doha Round of negotiations by WTO members is that there is no clear, committed constituency behind it in most countries. Neither the political leadership nor the business leadership is interested in concluding the DDA.
On the other hand, there is a committed constituency in favor of the multilateral trading system, ie, the WTO. Unfortunately, the latter has not strengthened the former. Now, there is a danger that the lack of commitment on the former seeps into the latter.
It's not necessary to equate the DDA and its positive outcomes with the vitality of the WTO. The success of the Plan B or even Plan A will depend on de-coupling of these two issues.
The Doha Round should be taken off WTO's back by putting it on a track that is not organically linked to WTO's core strengths, ie, the dispute settlement system, among others. The relevance, vitality and utility of the WTO are not wholly dependent on conducting rounds of negotiations.
Is there a lack of interest on the part of business to push their governments to conclude the Doha round?
Since 60 percent of trade in manufactured goods is mainly intra-industry, the business appetite to get a deal on Doha is not so attractive. But Ujal Bhatia set it right by saying that it is not business that can be blamed for the Doha impasse, but the governments' apathy.
The challenge for the never-say-die Lamy is to cajole governments to bury their apathy and move ahead on Plan A. Only time will tell whether he will succeed like Robert Bruce of Scotland, after he re-launched his attack on England in the 14th century when inspired by a spider who went through on its ninth attempt, and won.
(The author is secretary general of the Consumer Unity and Trust Society, CUTS, International)
The third review conference on Aid for Trade was organized at Geneva on July 18. The event was impressive and attended by a large number of countries, intergovernmental and non-governmental organizations.
It came about thanks to the enthusiasm, vision and determination of Pascal Lamy, head of the World Trade Organization.
The meeting was addressed by the heads of the international lending institutions, the UN Development Program, (UNDP), the Organization for Economic Cooperation and Development (OECD) and a large number of ministers and diplomats.
What was sadly not mentioned in the big meeting was that the Doha Development Agenda (DDA) by itself is the best way forward to assist the poor to trade their way out of poverty. After all, the DDA was designed to deliver development gains to all developing countries by addressing the imbalances in the Uruguay Round Agreements. Alas, the DDA calculus continues to boggle minds about its non-progress, but one never knows what lies in the future.
Bob Zoellick, the head of the World Bank and former US chief trade negotiator, who launched the DDA in 2001, launched a broadside against the US government for "dumbing down" the ongoing and largely stalled Doha round of world trade talks. In his remarks at the opening session, Zoellick said, "The whole discussion has become very defeatist. I draw out the US, because the US should still be world leader."
Zoellick did not even spare his former boss, George W. Bush, for the impasse and did not wish to appear that he was blaming Obama alone. He also criticized certain emerging economies for being a part of the problem. As expected, the US reacted against the "dumbing down" criticism and as always shifted the blame to big developing countries like China and India for not doing enough.
Former Indian Ambassador to the WTO, Ujal Singh Bhatia, in an electronic debate on the CUTS (Consumer Unity and Trust Society) Trade Forum, reminded us that the Doha mandate provides for special treatment to developing countries, and less than full reciprocity for developing countries. "If the US and others who played a strong role in designing the Doha mandate had reservations about the status of developing countries, they should have said so at that time. You do not change the rules when the game is coming to a close," Bhatia said.
Be that as it may, the fireworks at the Aid for Trade event in Geneva has raised the ante on the DDA again. In my article on this page on May 19 on a Plan B for Doha ("Time is ripe to close the Doha trade deal"), I had raised several important points, but let me revisit just two of them to envision if Plan A can be resurrected.
Firstly, one does not know what Plan B would entail. Secondly, to address the demands of the US, I had argued that for India it defies economic logic to maintain bound rates four to five times higher than the average applied rates for some farm goods. The international community have been discussing Plan A for 10 years, and are now descending to a lighter Plan B, and one does not know even if that will be a smooth road.
Imagine the huge cost of the decade-long talks. And some have started linking the failure of the Doha Development Agenda talks as something that will affect the WTO itself. This is a highly mistaken notion.
The main reason behind the non-progress of the Doha Round of negotiations by WTO members is that there is no clear, committed constituency behind it in most countries. Neither the political leadership nor the business leadership is interested in concluding the DDA.
On the other hand, there is a committed constituency in favor of the multilateral trading system, ie, the WTO. Unfortunately, the latter has not strengthened the former. Now, there is a danger that the lack of commitment on the former seeps into the latter.
It's not necessary to equate the DDA and its positive outcomes with the vitality of the WTO. The success of the Plan B or even Plan A will depend on de-coupling of these two issues.
The Doha Round should be taken off WTO's back by putting it on a track that is not organically linked to WTO's core strengths, ie, the dispute settlement system, among others. The relevance, vitality and utility of the WTO are not wholly dependent on conducting rounds of negotiations.
Is there a lack of interest on the part of business to push their governments to conclude the Doha round?
Since 60 percent of trade in manufactured goods is mainly intra-industry, the business appetite to get a deal on Doha is not so attractive. But Ujal Bhatia set it right by saying that it is not business that can be blamed for the Doha impasse, but the governments' apathy.
The challenge for the never-say-die Lamy is to cajole governments to bury their apathy and move ahead on Plan A. Only time will tell whether he will succeed like Robert Bruce of Scotland, after he re-launched his attack on England in the 14th century when inspired by a spider who went through on its ninth attempt, and won.
(The author is secretary general of the Consumer Unity and Trust Society, CUTS, International)
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