Doha talk ‘impasse’ lingers in WTO

Business Standard, December 19, 2011
Gloom over ministerial, courtesy US-China spar, conflict between cotton-producing African nations.

The Doha round of global trade talks has once again ended in a complete deadlock at the World Trade Organisation (WTO) headquarters in Geneva, even as countries have agreed on continuing the round and achieve progress in some areas.

While the mood this time was slightly sombre unlike the case with the previous ministerial meetings, a major conflict of interest was seen between the US and China, besides between cotton-producing African countries.

Ministers highlighted the importance of keeping markets open and the need to resist protectionism, particularly in today’s challenging global economic environment. Many ministers sought a stronger message against protectionism, stating that the prevailing economic climate had made it all the more essential, according to a statement issued by the WTO after closing the round that saw 153 member-countries coming together to hammer out a deal.

A number of ministers expressed concern over the increase of protectionism in agricultural trade in the form of trade-restrictive measures —without scientific or technical justification. Some ministers also aired worries about an increasing resort to private standards and food-labelling requirements.

Said WTO director-general Pascal Lamy, while closing the two-day event: “Ministers deeply regret that, despite full engagement and intensified efforts to conclude the Doha Development Agenda single undertaking since the last Ministerial Conference, the negotiations are at an impasse. Despite this situation, Ministers remain committed to work actively, in a transparent and inclusive manner, towards a successful multilateral conclusion of the Doha Development Agenda in accordance with its mandate.”

On the work ahead, while a number of ministers emphasised their openness to different negotiating approaches, some expressed strong reservations about plurilateral approaches. Many members —according to Lamy — stressed that any different approaches in the work ahead should conform to the Doha mandate, respect the single undertaking, and be truly multilateral, transparent and inclusive.

CUTS International says the countries should have just declared a moratorium and started everything on a new slate. “The water is becoming murkier,” said Pradeep S Mehta, secretary-general of the organisation. “The problem is that the US and the EU have now decided to start an open-ended agreement on services…a plurilateral agreement that would not be beneficial for anyone,” he said. Further, the US is unable to do a deal due to Cotton-4 — and not because of China or India. “This time, each country also had a small delegation. But thankfully India was not seen as a spoil sport,” Mehta added.

The Cotton-4 countries, or C-4 countries, imply the four major African producers of the crop: Benin, Burkina Faso, Chad and Mali. These countries had been greatly impacted by the subsidies doled out to cotton farmers in the US and the EU.

Sure, there were some successes in the meeting. Russia, Samoa, Vanuatu and Montenegro were brought into the group and a last-minute deal to seal a landmark reform of government procurement rules was agreed. But the talks started on a sour note when China slapped punitive duties on large cars and SUVs imported from the US in the latest in a tit-for-tat trade spat.

According to experts, the cost of this failure of the WTO is likely to be considerable. The next window of opening for a Doha deal would be available only after a new administration assumes office in the US in 2013.

Ficci laments that it was disconcerting that the conference was not successful in giving direction on the way forward so far as the Doha talks are concerned. “We call upon the ministers to step up their efforts to break the deadlock so that we could move closer to realising the significant potential of the Doha development round,” added R V Kanoria, president-elect of the industry chamber.

This year marks the tenth anniversary of the Doha round of global trade talks that started in Qatar in 2001. Since then, the talks have missed several deadlines.

Indian Institute of Foreign Trade (IIFT) notes that it is good that most countries have agreed to continue the round. “They have committed that the round is important and that multilateralism is important in global trade,” said Abhijit Das, head of IIFT’s Centre for WTO Studies. “One has to be patient while making conclusions about the round. The matter is highly complex.”

As for the government, it has highlighted the need to keep the negotiating process transparent and inclusive. Minister of Commerce and Industry and Textiles Anand Sharma, who came back yesterday after attending the meeting in Geneva, articulated India’s strong commitment to the issues affecting the least developed countries (LDCs), besides the small and vulnerable economies that have hitherto remained marginalised from the global trading regime.

The minister has been of the view that the smaller and poorer nations cannot be left behind. “Thus, it is incumbent upon all member-states to accord highest priority to the concerns of the LDCs,” he added.

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